Hapag-Lloyd is expecting to see an improvement in operating earnings this year as freight rates and transport volumes grow and merger synergies come to fruition.
But the German liner operator's chief executive said that 2017 has had a challenging start.
"Due to long-term contracts we have not yet been able to fully capture the recent positive rate development in the spot market while bunker price has increased significantly," said Rolf Habben Jansen in the company's annual reoprt.
Annual loss
The company closed the year with a net los of EUR 93.1m ($101m), flipping a profit of EUR 114m a year earlier. The liner operator delivered full-year earnings before interest, taxes, depreciation and amortisation of EUR 607m, down from EUR 831m.
Hamburg-based Hapag-Lloyd said that global trade growth and containership capacity figures point to higher rates this year.
Also, the synergies from the merger with Chile's Compania Sud Americana de Vapores and a cost saving initiative will help 2017 earnings.
Synergies from Hapag-Lloyd's planned merger with United Arab Shipping Co will not kick in until 2019, when $439m in annual synergies offset by $150m in one-time costs.
"We expect some market improvement in 2017, but our success will largely depend on our ability to achieve more sustainable freight rates," said Jansen.
"Longer term, the lack of orders for new builds and the continued high scrapping figures point to a better equilibrium between capacity supply and demand."
