Maersk Raises Profit Forecast as Earnings Almost Double
A.P. Moeller-Maersk A/S (MAERSKB) raised the earnings forecast for its container-shipping line, the world’s largest, after second-quarter profit at the unit almost doubled as lower fuel prices and costs offset a drop in freight rates.
The company now expects Maersk Line to report a profit this year “significantly above” earnings last year, compared with a previous forecast of profit “above” the 2012 level, the Copenhagen-based group said in a statement today. Maersk Line’s net income totaled $439 million in the three months through June, compared with $227 million a year earlier.
“Maersk Line revises its expected result on continued strong cost performance and the stronger result for the first half of 2013 compared to last year,” it said. The improvement in profit “was driven by lower unit costs through the continuous focus on operational cost savings mainly from vessel network efficiencies and also helped by lower bunker price.”
Maersk Line has trimmed its fleet and slowed vessel speeds to curb capacity, as falling consumer demand hurts cargo volumes and carriage prices. The Shanghai Containerized Freight Index -- a measure of prices for cargo leaving the world’s busiest port - - was 22 percent lower at $1,133.14 at the end of June this year compared with the end of the second quarter last year. The Asia-to-Europe trade is Maersk’s most important route.
The shipping company today revised its forecast for growth in global demand for seaborne containers, saying it now expects it to rise 2 to 3 percent in 2013, compared with a previous forecast of growth of 2 to 4 percent.
A.P. Moeller-Maersk, Maersk Line’s parent, reported a profit of 4.48 billion kroner ($801.4 million), which beat the average analyst estimate of 3.24 billion kroner.
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