Maersk group first half profit up 8pc to US$2.7 billion, on 11pc more sales

Time:2011-08-18 Browse:48 Author:RISINGSUN

DANISH shipping and logistics giant AP Moller Maersk Group has posted an eight per cent year on year first half profit increase to US$2.7 billion drawn on revenues of $29.9 billion, a rise of nine per cent.

"Thanks to the good performance of our terminals and oil related businesses, the group has delivered a satisfactory result for the first half-year," said CEO Nils Andersen.


"As we anticipated at the start of the year, the shipping market has been difficult, due to growing capacity, and we expect the slow economic growth and market volatility to continue for the coming quarters," he said.


"We have taken advantage of our solid financial position to invest in our core businesses and are thereby preparing ourselves for continued and profitable long-term growth," said Mr. Andersen.


Unlike other shipping companies, high oil prices were a blessing to Maersk`s bottom line. Oil and gas activities made a profit of US$1.2 billion at an average $111 a barrel, said the statement with prices 44 per cent higher than the same period last year.


The container business made a profit of $4 billion - up 4.5 per cent. "Supply of new capacity reduced rates and this, combined with high bunker prices, set margins under pressure throughout the period," said the Maersk statement.


"The number of containers carried increased six per cent to 3.8 million FEU, while average freight rates, including bunker surcharges, were three per cent lower than in the same period last year," the statement said.


The terminal activities made a profit of $304 million and excluding divestment gains and other special items. Throughput increased eight per cent year on year.


"During the period, APM Terminals secured a number of new investment and development opportunities, mostly in emerging markets," said the statement.


The group said it still expects a result lower than the 2010 result as predicted in May, including the forecasted $700 million gain from the divestment of Netto Foodstores Limited, UK.


"The group expects global demand for seaborne containers to grow by 6 - 8 per cent in 2011. The global supply of new tonnage is expected to grow more than the freight volumes, especially on the Asia-Europe trade," said the statement.


Freight rates are expected to remain under pressure, and high bunker and time charter costs are expected to continue to impact margins negatively, said the statement, adding that it expects containers to produce a "modest" profit by the end of the year.