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Friday, 14 August 2015

Maersk reports ‘very weak’ container demand as APMT sees H1 profits slide 20%

Global shipping firm Maersk Line has reported  ‘very weak’ demand for container freight for the first half of this year and predicts the segment will grow ‘slower than expected’ at a rate of 2-4% over 2015 as a whole.

Despite the poor figures for container traffic Maersk Line delivered a ‘satisfactory’ profit for the first half of $ 1.2 billion profit – a 22% improvement compared to the same period the previous year.

“We have built a business which remains profitable despite fierce competition, falling rates and wavering demand. Driven by our low cost position, we continue to lead the industry on profit and margins. I am convinced we can do more and in the coming years grow our business at least in line with the market. We have the people and we have the assets. Most importantly, we continue to improve and deliver the services our customers want,” Søren Skou, chief executive of Maersk Line commented.

Reflecting the tougher competition in the sector, parent company Maersk Group reported a fall in revenues of 8% to $1.1 billion in the second quarter

“In a quarter impacted by lower average container rates and a lower oil price, the Maersk Group achieved a satisfactory result with an underlying profit of USD 1.1bn (USD 1.2bn),” Nils Smedegaard Andersen, chief executive of Maersk Group commented.

The turbulence in the oil price has had a negative influence in the oil and offshore markets and countries dependent on oil. This has changed the outlook for Maersk Oil, Maersk Drilling, APM Terminals and APM Shipping Services, where previously announced profit and growth targets will be replaced by plans adapting to the volatile environment.”

APM Terminals profits decline 20%

The firm’s sister company, port operator APM Terminals, also reported tougher competition in the first of the year with profit declining 19.8% to  $351 million from $438 million in the same period last year.

“The number of containers handled by APM Terminals (weighted with APM Terminals’ ownership interest) decreased by 6% com- pared to 2014, reaching 9.2m TEU (9.8m TEU). This was impacted by the divestment of APM Terminals Virginia, Portsmouth, USA and Terminal Porte Océane S.A. Le Havre, France during Q3 2014. Excluding these, like-for-like volumes decreased by 3.5% in Q2, whereas the overall global container market grew approximately by 4.3% in Q2 (Drewry),” an APM Terminals spokesperson said in a statement.

The decline in profitability was blamed on lower oil prices which created ‘significantly less import volumes’ in West Africa and Russia. While APM Terminals reported that  it had benefited from ramped up volume in Santos, Brazil  and also

implemented cost savings initiatives worth an estimated $100 million in H1 2015 these ‘only partly mitigated’ the impact from adverse market conditions.

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