[EN-SEA] "Maersk Line" Profit Returns As Sales Rise 23pc To US$5.8 Billion

DENMARK's Maersk Line, the world's biggest container shipping company, posted a first quarter profit of US$168 million drawn on a 23 per cent revenue increase to $5.8 billion from $4.7 billion last year.

The news came with the first quarter results of parent AP Moller-Maersk, which posted a $639 million profit after sustaining a $373 million loss in the same quarter last year. Its container unit, Maersk Line, posted a quarterly loss last year of $581 million.

The upturn this year was attributed to increased container traffic, rising freight rates and higher oil prices, the latter which increased group energy revenues 20 per cent to $13.2 billion against sales of $11 billion in the first quarter last year.

After five straight quarters in the red, the group returned to profitability.

"We expect an improved [full year] operating result compared to earlier expectations of a modest profit mainly because of the recovery in our container business, which is now expected to post a profit in 2010," said AP Moller-Maersk CEO Nils Andersen.

The group's container business suffered a $2.1 billion loss last year after a $583 million profit in the year before.

Container volumes are expected to increase at least five per cent this year on rising demand from the US and Europe, said Maersk.

Maersk Line and Safmarine increased volume to 1.8 million FEU in the first quarter from 1.5 million FEU in the same period the year before mostly on headhaul, which grew 18 per cent, as well as intra-Asia which shot up 70 per cent.

Freight rates came to $2,863 per FEU in the first quarter, 18 per cent above the $2,424 charged in the same quarter last year.

"Transpacific routes were negatively affected by the low rates on contract cargo during the first quarter of 2010. Considerable rate increases and reasonable volume coverage have been achieved for the contract season as of May 1," said the group statement.

But Mr Andersen warned: "There is still uncertainty in how the volumes and the rates will develop in the rest of the year. We will continue to improve our competitiveness, and seize opportunities that arise in the wake of the crisis."

APM Terminals posted a first quarter earnings of $115 million up from its $60 million profit a year ago on much the same revenue of $1.1 billion over $1.08 billion.

The number of containers handled rose to 7.6 million TEU from 7.1 million TEU in the first three months of 2009.

The group's forwarding arm, Damco, increased freight volumes for ocean freight 23 per cent and air freight by 43 per cent, "both well above market", said the group statement.

Supply chain management (SCM) services grew seven per cent, which the group said was in line with market growth.

At the end of the quarter, the Maersk fleet consisted of 539 containerships of 2.1 million TEU, of which 250 are owned and 289 are chartered.

The group has chartered 16 multi purpose vessels (MPV) and 41 container vessels and four MPVs are on order. Delivery of one containership and one MPV is expected this year.

Source : HKSG, 14.05.10.