Maersk Boosts 2008 Profits
08 Mar 2009
Source:JOC

Freight rate outlook for 2009 called 'extremely negative'
LONDON -- Maersk Line, the world's biggest ocean container carrier, booked a modest increase in profits in 2008 as cost cuts, improved operating performance

and higher freight rates in the first half compensated for a global market downturn in the final quarter.

Maersk's Danish parent A.P. Moller-Maersk on March 5 said the line's earnings, which climbed to $205 million from $106 million in 2007, are "still not satisfactory".

"The outlook for container rates is extremely negative", A.P. Moller-Maersk warned, as moves by carriers to cut services and lay up ships will be outweighed by the delivery of new tonnage in 2009 and 2010.

There was an "unprecedented" drop in container traffic at the start of 2009, with January shipments down 20 percent from a year ago. Global container volume will decline through 2009, Moller-Maersk forecast.

A.P. Moller-Maersk, which is also active in bulk shipping, shipbuilding and energy, reported net profit of $3.5 billion, up from $3.4 billion in 2007, on revenues

 of $61.2 billion against $51.2 billion the previous year. "Everything considered, 2008 was a satisfactory year," the Copenhagen-based company said.

Maersk Line's revenue rose 13 percent to $28.7 billion from $25.8 billion, driven by an eight percent increase in average freight rates, including bunker surcharges,

 and higher revenue from selling capacity and leasing ships to other carriers in Vessel Sharing Agreements. Traffic was flat at 12.4 million TEUs while the

global market grew by five percent.

Maersk expects to take delivery of nine container vessels with a total capacity of 33,200 TEUs in 2009. Six ships are scheduled for delivery in 2010, and a

further 32 are on order for delivery in 2011-2012. The fleet stood at 464 ships of 1.9 million TEUs at the end of 2008.

Safmarine, the independently managed carrier focusing on routes to and from South Africa, increased profit before financial items to $185 million from

 $131 million in 2007 as revenues rose 28 percent and volume was 14 percent higher at 1.46 million TEUs.

APM Terminals, the port operating unit, lifted profits to $161 million from $106 million as revenues rose 24 percent to $3.1 billion. Traffic rose eight percent,

 double the global market growth, to 34 million TEUs. The share of third party carriers rose to 38 percent from 34 percent in 2007 as they boosted traffic

by 25 percent while Maersk Line's throughput was broadly unchanged.

A.P. Moller-Maersk said the outlook for 2009 is subject to considerable uncertainty due to the development of the global economy. "Specific uncertainties

relate to the development in container freight rates, transported volumes, the dollar exchange rate and oil prices."

The company says 2009's operating result, excluding gains on ships and rigs, likely will be "significantly below" last year's $2.6 billion.