Maersk see profits vanish
November 9, 2011
Maersk, the world’s biggest container shipping line, has seen expectations of a modest profit turn into a loss as freight rates continue their downward spiral.
Today, parent company AP Møller-Maersk revealed Maersk Line, which is often regarded as a barometer of global trade, posted a third-quarter net loss of Dkr1.58 billion (US$293 million) compared with a profit of Dkr5.9 billion a year earlier.
The conglomerate had forecast a full-year 2011 net profit in the range of $3.1 billion to $3.5 billion including divestment gains, which is below the $5.02 billion for 2010.
The group said net profit fell to Dkr1.92 billion in July-September from Dkr9.62 billion in the same period last year.
APMM said: “The group’s container (shipping) activities now expect a negative result for the full year as a consequence of lower rates on especially the Asia-Europe trade.”
CEO Nils Smedegaard Andersen said: “We are on the way towards a fairly satisfactory result for 2011 especially when one takes the very low container shipping rates into account.”
Maersk said average third-quarter container freight rates, including bunker surcharges, were 12% lower than in the third quarter last year and 6% lower for the first nine months of the year compared with the same period last year.
The group’s oil and gas operations, which contributed most of the profit, were helped by higher prices.
Freight rates continue to fall mainly due to container shippers adding too many ships in anticipation of an economic recovery, spurring overcapacity.
Maersk Line, which transports about 16% of the world’s manufactured goods by sea, said today that higher global container demand has not been able to offset oversupply. It transported the equivalent of 2.1 million 40ft containers in the three-month period, a 16% increase.
Courtesy of IFW
