The 43.33% stake in ‘Albert Ballin’ Joint Venture GmbH & Co. KG taken after the sale of Container Shipping has been measured at equity in TUI’s consolidated financial statements since April 2009. Since the stake in ‘Albert Ballin’ constitutes a financial investment from TUI AG’s perspective, the proportionate at equity result is not included in the TUI Group’s operative performance indicator EBITA. For information purposes, the table below presents container Shipping from Hapag-Lloyd’s perspective on a 100 per cent basis.
Key figures – Container Shipping
| € million | Q2 2009/10 | Q2 2008/09 | Var. % | H1 2009/10 | H1 2008/09 | Var. % |
| Turnover | 1,268.8 | 1,118.9 | + 13.4 | 2,415.7 | 2,705.2 | - 10.7 |
| EBITA | 2.7 | 902.3 | - 99.7 | - 55.3 | 879.1 | n/a |
| Gains on disposal | – | - 1,143.0 | + 1.4 | - 1,143.0 | ||
| Restructuring | – | – | + 0.4 | + 0.1 | ||
| Purchase price allocation | + 11.7 | + 19.0 | + 22.9 | + 33.4 | ||
| Other one-off items | - 1.0 | – | + 22.7 | + 0.3 | ||
| Underlying EBITA | 13.4 | - 221.7 | n/a | - 7.9 | - 230.1 | + 96.6 |
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Development of business operations
Turnover and earnings
In the second quarter of 2009/10, Container Shipping reported a considerable recovery. Turnover grew by 13% year-on-year to around €1.3bn. This development was mainly driven by a 5% rise in transport volumes and an 8% increase in freight rate levels. The development of turnover was curbed by a 6% weakening of the US dollar exchange rate against the Euro versus the previous year.
Underlying earnings grew by €235m to €13m in the second quarter of 2009/10. This increase in earnings was above all attributable to a significant year-on-year rise in freight rates and higher transport volumes. Apart from rate and margin effects, earnings also benefited considerably from the successful implementation of cost control programmes. In the period under review, special one-off effects worth €11m had to be adjusted for. Earnings before adjustment for these effects were €3m. The comparative period in the prior year had included the book profit from the sale of the majority stake in Hapag-Lloyd of around €1.1bn. Adjusted for this book profit, the comparative prior-year period posted reported earnings of €-241m.
Transport volumes and freight rates Hapag-Lloyd
| Q2 2009/10 | Q2 2008/09 | Var. % | H1 2009/10 | H1 2008/09 | Var. % | |
| Transport volumes (in '000 TEU) | 1,173 | 1,120 | + 4.7 | 2,316 | 2,437 | - 4.9 |
| Freight rates (in US$/TEU) | 1,422 | 1,317 | + 8.0 | 1,396 | 1,480 | - 5.7 |
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Despite the continued margin-oriented selective cargo management, Hapag-Lloyd achieved a 5% increase in transport volumes year-on-year in the second quarter. In the period under review, Hapag-Lloyd’s transport volumes thus totalled 1.2m TEU. Transport volumes were above all increased in the Latin America and Far East trade lanes. For the first half of 2009/10, transport volumes totalled 2.3m TEU, still falling 5% short of the previous year’s level. The average freight rate in the second quarter stood at 1,422US$/TEU, up 8% year-on-year. This was mainly driven by the considerable increases in freight rates in the Far East trade lane. For the first half of 2009/10, the freight rate level was 1,396 US$/TEU, down 6% year-on-year.
Should the recovery of Container Shipping continue to stabilise, Hapag-Lloyd expects to be able to report positive operating earnings for the reporting period from October 2009 to September 2010.
Financial exposure of TUI AG in Container Shipping
Financial exposure of TUI AG in Container Shipping
| € million | 30 Sep 2009 | 31 Dec 2009 | 31 March 2010 |
| Equity stake in March 2009 | 910 | 910 | 910 |
| Cash capital increase | – | 62 | 124 |
| Debt equity swap | – | – | 153 |
| 43.33 % stake | 910 | 972 | 1,187 |
| TUI long-term loan | 400 | – | – |
| TUI short-term loan | 380 | 380 | 227 |
| TUI subordinated loan | 300 | – | – |
| TUI revolving credit facility | 200 | 200 | – |
| TUI vendor loan | 180 | 180 | 180 |
| TUI CTA loan | 215 | – | – |
| Loans | 1,675 | 760 | 407 |
| Hybrid capital I | – | 350 | 350 |
| Hybrid capital II | – | 350 | 350 |
| Hybrid capital III | – | 215 | 215 |
| Hybrid capital | – | 915 | 915 |
| Financial exposure | 2,585 | 2,647 | 2,509 |
As at 31 December 2009, the financial exposure in Container Shipping totalled around €2.65bn. Based on the refinancing measures for Container Shipping agreed between the shareholders on 17/18 December 2009, the following measures were implemented in the quarter under review:
- Contribution of the second tranche of the agreed cash capital increase of €62m to a total of €124m as per 31 March 2010.
- Implementation of the non-cash capital increase ex TUI’s short-term loan of €153m. Given the non-cash capital increase, TUI’s short-term loan stood at €227m as per 29 January 2010.
- In accordance with the agreement, TUI’s revolving credit facility worth €200m was acquired by ‘Albert Ballin’ at the end of March 2010 and subsequently contributed to equity in Container Shipping as a non-cash capital increase.
Following the completion of the measures agreed between the Container Shipping shareholders on 17/18 December, TUI’s financial exposure totalled around €2.51bn as per 31 March 2010.