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High prices give Maersk largest-ever profit for a Danish company

Danish shipping giant Maersk on Wednesday posted record-beating profits in 2021, as container freight prices continued to soar due to the global supply chain crunch caused by the Covid pandemic.

Maersk containers at Aarhus Harbour
Maersk containers at Aarhus Harbour. The shipping giant recorded the highest ever annual profits by a Danish company in results released on February 9th 2022. File photo: Henning Bagger/Ritzau Scanpix

For the full year, Maersk registered a net profit of $18 billion (15.8 billion euros), the highest profit ever recorded by a Danish company.

For 2022, Maersk predicted a “solid first half” would be followed by a “normalisation” of the sector early in the second part of the year.

Demand for shipping plunged at the start of the pandemic, but has rebounded strongly since mid-to-late 2020.

As a result, sales for 2021 jumped by 55 percent to $61.8 billion, with the Ocean container shipping segment soaring by 65 percent.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) almost tripled to $24 billion, thanks to lower costs and optimisation of its logistics chain, Maersk said.

Its main competitors, Italy’s MSC and France’s CMA CGM, have also posted record profits for 2021.

Shipping customers have had their patience put to the test and had to dig deep into their pockets as the supply chain disruptions plague the container shipping segment.

In the fourth quarter, the sector experienced “exceptional conditions with significant and persisting bottlenecks, while the volumes were down”, Maersk said in its annual report.

Freight costs rose especially on Asian routes to Europe and North America, the Danish group said, with the unit cost at fixed bunker increasing by 13 percent.

Maersk’s record profits are expected to continue this year, with EBITDA forecast to come in at the same level as in 2021, around $24 billion, despite the normalisation expected in the second half.

The company, which aims to be carbon neutral by 2050 by turning to green energy for its fleet, said its emissions declined by 42 percent in 2021. 

READ ALSO: Maersk profits up as global supply chain disrupted

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SAS

SAS pilot unions delay strike for three days of extra talks

Sweden’s pilot union has agreed to postpone the strike planned for Wednesday by three days in the hope of striking a last minute deal with the SAS airline.

SAS pilot unions delay strike for three days of extra talks

The strike, due to start on June 29th, has been pushed forward until just after midnight on July 1st, to provide time for extra negotiations with the Scandinavian airline’s management over a new collective bargaining agreement. 

After weeks with intensive negotiations over a new agreement between SAS leadership and 1,000 of the airline’s pilots, both sides are now willing to continue discussions, pushing back the deadline by three days. 

“SAS and the Norwegian pilot union are in agreement that we will continue negotiations for three days,” Norwegian national mediator Mats Wilhelm Ruland said. “There’s been intensive work towards finding a solution.”

Karin Nyman, Swedish press officer for SAS, said that the company was glad to have been given more time.

“It means above everything else that our customers will be able to travel over the next few days,” she told Swedish newswire TT.

Martin Lindgren, chairman of the Swedish SAS branch of the Swedish Air Line Pilots Association (SPF), would not comment on the content of the negotiations, but said that it was worth continuing to try and reach an agreement.

“We feel a great responsibility towards both SAS and our members, but above all towards our passengers,” he said in a press statement.

“Although we have gone to great lengths to come to an agreement, many issues remain unsolved. The strike can only be avoided if SAS show a real will to meet us. As of now, we’re choosing to give the other side yet another chance to do that.”

The airline’s Danish press officer, Alexandra Kaoukji, wrote in a statement to Danish newswire Ritzau that mediators believe “there is a possibility of reaching consensus” on a new agreement between the airline and pilots.

“The new 72-hour deadline means that our passengers will be able to travel,” she told the newswire. “We’re very happy about that. Our hope is therefore that we can find a solution and that passengers will not be affected.”

Nyman was also hopeful that both sides would be able to come to an agreement without resorting to strike action.

“We can only state that we’ve had constructive talks in recent days in our negotiations, and obviously the mediators have then made the assessment that there is a chance of reaching an agreement,” she said.

Pilots are unhappy that SAS is hiring new pilots on cheaper contracts in their two subsidiaries, SAS Link and SAS Connect. If the two parties cannot come to an agreement, up to 30,000 SAS passengers could be affected per day, the airline said on June 27th.

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