Hamburg Süd's "Satisfactory" year

HAMBURG SÜD’S “SATISFACTORY” YEAR

THE Hamburg Süd Group, which includes Brazilian shipping company Alianca, says that last year was “satisfactory” with cargo volume increasing in the liner services by around 21%, 1.84 million.

The company says: “Alongside powerful organic growth, this rise was aided by the takeover of the cross-trade operations of the Russian shipping company Fesco, which took effect on 30 June 2006. The acquisition considerably improved the Group's market position in the trade lanes between Australia/New Zealand, Asia and US West Coast. Additionally, the start of 2006 saw the complete takeover of Ybarra Sud's liner operations between the Mediterranean and East Coast South America. Hamburg Süd had held 50 per cent of Ybarra Sud since the late 1980s.”

Turnover rose by 5.2% on the previous year, to around euros3,194m. Of this, euros2,692m was attributable to the liner division. The company notes that crucial factor here was freight rates, which came under considerable pressure in most services. Turnover in the tramp division, at euros396m. was about 13%..

The company does not produce profit figures but it notes: “In view of the pressure on earnings and costs, the result in the liner services fell below that of the previous year and in line with expectations. In comparison with many other major shipping lines, Hamburg Süd made a very respectable showing in the market. The tramp services again delivered an extremely pleasing, above-budget contribution to operating income. Since cash flow reached the planned level, 2006 can be described as still satisfactory from the viewpoint of our shipping group.”

Looking ahead the company says: “The decline in freight rates experienced since mid-2005 has now come to a halt in most of Hamburg Süd's trades. Since mid-2006 earnings gains have been made, though without reaching the level of previous years.”

It also says: “Hamburg Süd sees significantly greater earnings potential in further optimising its costs. Consequently, the newbuilding programme for container ships will be continued, with the goal of reducing unit costs through the deployment of larger vessels. Three new 3,750 TEU ships of the "Bahia" class were delivered between February and April 2007, while a further three are to follow before the year is out. They are being deployed in the shipping group's Asia/South Africa - South America East Coast service, where they replace a sizeable number of smaller vessels.”

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