Germany's Hapag-Lloyd boosted 2008 operating profit by 19 percent from a year ago but warned lower volumes and weaker freight rates will lead to a "considerable decline" in 2009 earnings. The world's fifth largest ocean carrier booked a profit of $285 million last year against $239 million in 2007 as revenue gained 4.3 percent to $8.4 billion from $8 billion.
Cargo volume rose two percent to 5.54 million TEUs and average freight rates were 13 percent higher than in 2007.
Hapag-Lloyd, whose parent TUI closed on the $6 billion sale of the carrier on Monday, lost $10.8 million in the fourth quarter as the global container market slipped deeper into recession.
The carrier will draw $946 million in the near future from a credit line of up to $1.5 billion provided by TUI to seal the sale to the Hamburg-based Albert Ballin consortium.
TUI also retained an extra 10 percent of Hapag-Lloyd above the originally planned 33.3 percent, at a total cost of $1.2 billion.
The carrier will save $360 million in 2009 from cancelling services, especially on the Europe/Asia routes and renegotiating or not renewing charters of container ships and other measures, TUI chief executive Michael Frenzel said.
Hapag-Lloyd is also renegotiating rates with terminal operators and other suppliers including railways and feeder ship companies and will freeze recruitment.
"Further rationalization measures will be decided and announced soon," Frenzel said. "We expect a considerable decline in [Hapag-Lloyd] earnings" in 2009 due to lower volumes and freight rates.”
TUI has "a high level of freedom" to reduce its 43.3 per cent Hapag-Lloyd stake over time, Frenzel said. But "we will stand by them even in difficult times," he said.
Hapag-Lloyd had 128 ships of approximately 500,000 TEUs capacity at the end of the year.
Cargo volume rose two percent to 5.54 million TEUs and average freight rates were 13 percent higher than in 2007.
Hapag-Lloyd, whose parent TUI closed on the $6 billion sale of the carrier on Monday, lost $10.8 million in the fourth quarter as the global container market slipped deeper into recession.
The carrier will draw $946 million in the near future from a credit line of up to $1.5 billion provided by TUI to seal the sale to the Hamburg-based Albert Ballin consortium.
TUI also retained an extra 10 percent of Hapag-Lloyd above the originally planned 33.3 percent, at a total cost of $1.2 billion.
The carrier will save $360 million in 2009 from cancelling services, especially on the Europe/Asia routes and renegotiating or not renewing charters of container ships and other measures, TUI chief executive Michael Frenzel said.
Hapag-Lloyd is also renegotiating rates with terminal operators and other suppliers including railways and feeder ship companies and will freeze recruitment.
"Further rationalization measures will be decided and announced soon," Frenzel said. "We expect a considerable decline in [Hapag-Lloyd] earnings" in 2009 due to lower volumes and freight rates.”
TUI has "a high level of freedom" to reduce its 43.3 per cent Hapag-Lloyd stake over time, Frenzel said. But "we will stand by them even in difficult times," he said.
Hapag-Lloyd had 128 ships of approximately 500,000 TEUs capacity at the end of the year.