Hamburg’s container carrier Hapag-Lloyd has reported a drop of revenues with 16% in sales resulting a in operation profit of only $ 123 or a 56% decline year-on-year. The German operator experienced a sharp decline of the current freight rates in their trade lanes.

CEO Rolf Habben Jansen  stated that in the seasonally weak first quarter Hapag Lloyd recorded an acceptable result with a small operating profit and an EBITDA margin of 6.4%.

During Q1 earnings before interest, taxes and EBITDA margins reached € 123.4 million compared with € 283.6 million in the first quarter of 2015. Meanwhile, earnings before interest and taxes (EBIT) totaled € 4.8 million compared with € 174.3 million a year earlier.

Rolf Habben Jansen also highlighted several other actions had been taken by Hapag Lloyd earlier this year. This included the deployment of two 3,5000-TEU ships in its cabotage niche business in South America, along with a new sales program called “compete to win,” which seeks to improve revenues.

“Both factors together represent around € 600 million in annual long-term earnings effects compared to the cost base in 2014. The OCTAVE 2 program will help to improve the cost base further by a high, double-digit million-dollar amount” Mr.  Habben Jansen continued.

With a fleet of 175 containerships and a total capacity of 955,000 TEU, Hapag-Lloyd has 9,400 employees at 366 sites in 118 countries around the globe. Habben Jansen concluded that with respect to the expected results for H2 2016 Hapag Lloyd remained cautiously optimistic.