The German container-shipping line closed the 2005 business year with an upbeat result before taxes of EUR 47.4 million, putting it firmly on course for profit, despite pressure on rates and a disproportionate rise in operating costs*
Last year the Europe-Asia specialist carrier, with 17 regular services and a capacity of 770,400 teus (up 2.2%), saw its handling volumes rise by 4.7% and recorded a total result before taxes of EUR 47.4 million.
In 2004, when operating costs were significantly lower and rates considerably more profitable in the market, Senator Lines had scored an exceptional record, with a result before taxes of EUR 60.6 million.
‘Our result for 2005 means we are ‘back to normal,’’ said CEO Hans-Hermann Mohr in comment on these figures, ‘but we continue very safely to be well in the black.’
With an average utilization ratio of over 95% for West-bound voyages on the Europe/Far East and Canada routes, Senator Lines has succeeded in maintaining its position as a specialized carrier in the market. On East-bound voyages too the company maintained its ground with a very good utilization ratio.
‘At the same time, however, developments in our Europe-Asia services since mid 2005 are depressing our forecast for this year,’ continued Hans-Hermann Mohr. ‘The paradox of strong demand and full ships on the one hand, and a highly critical slump in rates on the other, can only be solved if all carriers, both global players and specialists, pull together as one and return to the strong ground of a sensible pricing policy.’
According to statements by the Management Board, however, the Bremen-based company will not be changing its orientation as an independent European shipping line focusing on Europe-Asia services.
‘We expect in particular that China’s importance in international trade will increase to an extent which will enable us to expand our market position,’ continued Mohr.
An additional burden comes from operating costs, which in 2005 rose by a total of 10.5%. Thus average costs of heavy fuel oil per ton increased by 45% compared with the previous year. Feeder costs per teu rose last year by 15%, terminal rates per teu by an average of 9%.
‘Along with cost positioning, a central aim of our activities in this increasingly difficult environment is once again a significant rise in our service quality’, says Mohr.
‘We agree with those experts who, in face of ever larger (and ever fewer) global players, predict excellent opportunities for specialized carriers to score well in quite particular fields: reliability, data quality, and individual customer service. We are working on this more than ever.’
Some months ago, at the annual conferences of regional organizations in Europe, Asia and the Mediterranean, Mohr called for an uncompromising orientation in all the company’s activities towards a further increase in the quality of service which had brought it so many prizes in previous years.
Speaking to representatives of the agencies and of the company’s own sales offices, he emphasized the Management Board’s determination to carry out unpopular measures if members and partners of the service network failed to meet this high standard.
This year, through its participation at Transport Logistic China in Shanghai in September, at Trans Middle East in Dubai in November, and at various regional forums, Senator Lines strengthened its communication and raised its profile among the trade public.