Maersk Line confident of yearly profit despite Q1 loss of US$66m


DANISH shipping giant and the world's largest ocean carrier, Maersk Line, recorded a loss of $66 million for the first quarter of 2017, compared to a profit of $37 million for the first quarter of 2016.

Revenues totalled $5.5 billion, up 10.4 per cent year over year, driven by a rise in volumes and average freight rates.

Despite the loss in the first quarter, Maersk Line remains confident that steadily rising container rates will keep the carrier on track to meet its goal of the full-year net profit, according to media reports.

During the quarter, Maersk Line carried 2.6 million FEU, up 10.2 per cent from the same period in 2016, thanks in part to improved demand, but also reflecting an increased market share, maintained from the second half of 2016.

The company's average freight rate totalled $1,939 per FEU for the quarter, rising 4.4 per cent year on year. Maersk said the increase was driven by a 23 per cent year-over-year boost on the East West trades, particularly from Asia to Europe, while North American rates were roughly on par with last year.

CEO of Maersk Group, Soren Skou, said the liner division's earnings were pulled down by bunker fuel prices that increased by 80 per cent compared with the first three months of last year, but the carrier's profit goal was still in play.

By the end of the first quarter, Maersk Line had a fleet of 639 vessels - 284 owned and 355 chartered - compared with a fleet of 605 vessels - 287 owned and 318 chartered - at the end of Q1 2016.

Looking ahead to the remainder of the year, Maersk Line's acquisition of German ocean carrier Hamburg Sud is progressing as planned and is expected to close in the fourth quarter, subject to regulatory approvals, AP Moller-Maersk said.

Maersk Line is acquiring the north-south specialist from the Oetker Group for EUR3.7 billion (US$4 billion) on a cash and debt-free basis. A syndicated loan facility has been created to fully finance the acquisition.

Meanwhile, the Maersk Group reported a profit of $253 million with revenue reaching $8.9 billion in the first quarter, and expects to achieve an underlying group profit for 2017 that will be above the $711 million recorded in 2016.

APM Terminals (APMT), the Maersk Group's port terminal operating arm, recorded a profit of $91 million for the first quarter of 2017, a 15.7 per cent year-over-year decrease.

APMT's revenues for the quarter rose 4.8 per cent to $1 billion compared with the corresponding 2016 period. During the quarter, APMT handled 9.4 million TEU, up 8 per cent year over year, primarily due to acquiring Grup Maritim TCB's volumes, the group said.

Forwarder and logistics subsidiary Damco recorded a loss of $8 million for the quarter, compared to a profit of $2 million for the first quarter of 2016.

Revenues totalled $612 million, ticking up 2.7 per cent year over year, resulting from volumes growth in supply chain management, airfreight and ocean freight.

Source: Schednet

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