Maersk’s profits rise by shipping more containers
Danish shipping giant beats analysts' expectations with its first quarter profits. Citing improved performance, Maersk Line now expects to beat 2013's annual results.
Published: 21 May 2014 12:25 CEST
Maersk's positive results were down to shipping more containers at a lower average price. Photo: Maersk Line
Shipping and oil conglomerate A.P. Moeller-Maersk reported Wednesday a 62 percent rise in quarterly profit as it shipped more containers but for a lower average price.
Net profit for the group rose in the first three months of the year to 6.2 billion kroner ($1.15 billion) from 3.9 billion kroner ($710 million), beating a Dow Jones analyst consensus of 5.75 billion kroner ($1.05 billion), as earnings from container shipping line Maersk Line more than doubled to 2.48 billion kroner ($454 million).
Revenues climbed 0.9 percent to 64.2 billion kroner ($11.736 billion), falling slightly short of an analyst consensus of 65.66 billion kroner ($12.0 billion).
Maersk Line reiterated that global demand was expected to grow by four to five percent, but said it now believes its annual results will beat last year's due to "improved operational performance and utilisation".
The Maersk group, which in January sold its supermarket business for a gain of 14.2 billion kroner ($2.6 billion), raised its guidance for annual profit excluding discontinued operations, impairment losses and divestment gains to 21.9 billion kroner ($4.0 billion) from 19.7 billion kroner ($3.6 billion).
With a 15 percent market share in global container shipping, the company is considered a bellwether for international trade.
"Pressure from excess capacity is expected to remain throughout the year," Maersk said in a statement.
The financial crisis has weighed on the international shipping market and the major routes between Europe and Asia have been particularly badly hit by overcapacity.
The group's shipping business has outperformed a troubled sector partly due to cost cuts, and last year it announced an alliance with two other major ocean carriers on routes between North America, Europe and Asia, called the P3 Network.
The company said it expects the alliance to start operations in "the autumn of 2014" rather than a previously stated goal of the middle of this year pending regulatory approval.
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