Analysts forecast huge loss for Hapag Lloyd

The latest equity research by Commerzbank predicts that Hapag-Lloyd’s loss for the full year could be double this figure.

In the first quarter, Hapag-Lloyd was wholly-owned by Tui, the German shipping and travel group, which faces another tough annual meeting next week as the company opposes board changes proposed by John Fredriksen, its largest shareholder.

Tui is also scheduled to unveil first-quarter results, which are unlikely to flatter the group.

Commerzbank expects Tui to report an increased loss of €410m at EBITA level against €298m in the opening three months of 2008.

Although this estimate is burdened by one-off costs, relating to the integration of First Choice, the underlying EBITA loss is still expected to widen from €214m to €335m.

Commerzbank said the underlying loss would be driven by seasonality, recession and the impact of the Easter holidays falling in the second quarter, rather than the traditionally slow first quarter, as it did last year.

Although no longer fully-consolidated, Hapag-Lloyd’s performance still has a significant impact on Tui’s net result.

“In the first quarter we expect the shipping company will have felt the perfect storm of declining freight rates and volumes,” Commerzbank said.

“We estimate a net loss contribution of about €200m.”

As the sale of Hapag-Lloyd was not finalised until the end of March, Tui will absorb all of the container line’s first-quarter losses.

However, as the box line is being accounted for as a discontinued operation, losses do not form part of Tui’s EBITA and will be reflected lower down the profit and loss account.

For the remaining nine months of the year, Tui will reflect its 43.3% share of Hapag- Lloyd’s results.