Hapag-Lloyd made a loss of €93.1 million (US$101.1 million) in 2016, compared to a profit of €113.9 million (US$123.7 million) in 2015, according to annual results released by the company.

“We had a very challenging market environment in the first six months of 2016, but were able to improve revenue and results significantly in the second half of the year,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd. “Even though we performed relatively well in the industry in 2016, the bottom line is still that this result is not satisfactory.”

The shipping line transported 7.6 million TEUs in 2016, a year-on-year increase of 2.7%, but revenue dropped 14.3% to €7.734 billion (US$8.4 billion) due to the average freight rate, which was 15.4% lower at US$1,036/TEU.

Habben Jansen said that the company is expecting some improvement to the market in 2017, but its success will largely depend on more sustainable freight rates.

“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,” he said. “We will continue to work hard to make Hapag-Lloyd even more competitive and to build on our strong position. Our efforts will be supported by the expected synergies and the further diversification of our product portfolio due to the merger with UASC.”

The preparations for the closing of the merger with UASC are in their final stages. The merger is expected to result in annual synergies of US$435 million from 2019, according to Hapag-Lloyd.