- By Region
AP Møller-Maersk brushed aside concerns about the strength of the shipping industry as its container operations returned to profit in the second quarter and it raised its guidance for the full year.
Maersk Line, operator of the world’s largest container ship fleet, swung to a profit of $227m after losses a year earlier and in the previous quarter. The Danish group as a whole, which also includes significant oil operations, posted second-quarter net profits down 39 per cent to $965m compared with the same period last year on revenues down 1 per cent to $15.35bn, as a number of one-off gains were not repeated.
Despite the fall in profits, Maersk raised its target for the full year from a goal of slightly lower than last year’s net income of $3.4bn to one “slightly above”.
The move comes in spite of difficulties throughout the container shipping industry. The oldest shipping company in the UK, Stephenson Clarke last week went into liquidation, while there have been warnings from Germany of a large number of companies running into trouble.
Maersk is blamed by many for exacerbating the industry’s crisis last year by boosting capacity on the main Asia to Europe route, thus driving rates for each container lower.
But Maersk said both volumes and freight rates had increased in the second quarter with demand for containers rising 4 per cent compared with a year earlier. However, it conceded that the fall in volumes coming into Europe experienced in the first quarter accelerated in the three months to June.
The average freight rate in the second quarter was 14 per cent higher than in the first quarter and 4 per cent higher than a year earlier. Maersk Line, which said it was one of the first shipping companies to introduce widespread increases in rates, suffered a “slightly negative impact” on its market share as a consequence.
Maersk’s main profit driver remained its oil operations. But net income in the division fell from $694m to $468m on lower production.
Maersk’s B shares were flat in morning trading in Copenhagen at DKr40,640.