Danish freight Maersk doubles profits with freight prices up

Danish shipping giant Maersk said Wednesday its profits doubled in the second quarter as freight prices have soared due to persistent bottlenecks on trade routes.

Danish freight Maersk doubles profits with freight prices up
Signage at the Maersk offices in Copenhagen on July 30th. The shipping giant has again reported huge profits. Photo: Andrew Kelly/Reuters/Ritzau Scanpix

Demand for shipping plunged at the start of the Covid pandemic, but it has rebounded strongly since the second half of 2020, causing massive disruptions in supply chains.

Maersk, the world’s largest container shipping line along with Italy’s MSC, has posted robust profits since the second half of 2020.

Its net profit for the second quarter reached $8.6 billion, compared to $3.7 billion for the same period in 2021, up from record profits in the first quarter.

“We delivered an exceptionally strong result for the second quarter and consequently recorded the 15th quarter in a row with year-on-year earnings improvements,” Soren Skou, CEO of Maersk said in a statement.

The company’s revenue rose to $21.7 billion in the second quarter, up from $14.2 billion a year earlier.

The rise was “mainly driven by significantly higher freight rates” even as this was “slightly offset by a decrease in volumes and by higher costs related to bunker, handling and network”, Maersk said in its earnings statement.

“Landside congestion continues to be an issue around the world, with additional pressure from the Chinese lockdown,” it added, referring to China’s recent measures to contain Covid outbreaks.

On Tuesday, Maersk announced an updated guidance to its full year results, as a result of “the continuation of the exceptional market situation” within shipping.

Given the current market situation and despite withdrawing from Russia, the group said it expected earnings before interest, taxes, depreciation and amortisation of around $37 billion, up from its April forecast of $30 billion.

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SAS strike affected 380,000 passengers in July

More than 3,700 flights where cancelled and 380,000 passengers where affected by the 15-day strike which hit Scandinavia's SAS airline last month, the company has revealed.

SAS strike affected 380,000 passengers in July

“We sincerely apologize to our customers who were affected by the July strike,” Anko van der Werff, the company’s chief executive, said in a press release. “We are happy operations returned to normality again allowing us to start regaining our customers’ trust.”

According to the release, 1.3 million passengers travelled with the airline in July, which was still a 23 percent increase on the same month last year, when Covid-19 restrictions were still reducing tourism levels.

“In comparison with last month, the total number of passengers decreased with 32 percent and capacity was decreased by 23 percent, which was a result from the 15-day pilot strike,” the release read. 

Pilot unions in Sweden, Denmark and Norway, went on strike for 15 days last month over pay, conditions, and the company’s refusal to rehire pilots laid off during the Covid-19 pandemic on the same terms as before. 

The strike, which cost the airline between €9m and €12m a day, was ended on July 19th, after which it took several days to get flights back to normal

Van der Werff said company said it would now continue putting in place its restructuring plan, SAS FORWARD, and push ahead with restructuring in the US, where the company has filed for Chapter 11. 

He said these would both “accelerate the transformation process that will lead to a financially stable airline, that will be able to deliver the service our customers are expecting”.