The Maersk group said it delivered a “satisfactory profit” in the second quarter of 2015 of US$1.1 billion against $2.3 billion in the same quarter last year, negatively impacted by the lower oil price and lower average container freight rates.
Danish oil and shipping giant A.P. Moller-Maersk said it made an underlying profit of $1.1 billion in the second quarter from $1.2 billion year-over-year, with decreases in Maersk Line, Maersk Oil, and APM Terminals and increases for Maersk Drilling and APM Shipping Services.
The results were higher than expected by industry experts, as group CEO Nils Smedegaard Andersen said the company is keeping its outlook for the year.
“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) and maintain the expectation of an underlying result of around USD 4.0bn for the year. We reiterate our strategic direction of targeting profitable growth with top-quartile performance and a ROIC above 10% over the cycle in all business units,” he said.
Group revenue decreased by $1.4 billion or 11.9%, while operating expenses decreased by $966 million mainly due to lower bunker prices and cost-saving initiatives.
The group’s container shipping arm Maersk Line increased its volumes by 3.7% and maintains expectations of a higher underlying result than 2014.
Maersk Line reported a profit of $507 million in the second quarter from $547 million year-over-year and an underlying profit of $499 million from the previous year’s $543 million.
“Despite a sharp decline in the average freight rate of 14.1%, Maersk Line delivered a 10.1% (10.8%) ROIC based on its cost leadership strategy,” said the company.
Estimated EBIT margin gap to peers was at 6.8% points in the first quarter of 2015. This remains consistent with Maersk Line’s ambition to sustain a gap over its peers above 5% points, said a company statement.
Maersk Line also reiterated the expectation of a higher underlying result for 2015 from 2014’s $2.2 billion. Global demand for seaborne container transportation is revised to an expected increase by 2% to 4% versus previously by 3% to 5%.
Looking ahead, the shipping line said it will continue to improve its competitiveness through “cost leadership” and will maintain its medium-term ambition of an EBIT margin gap to peers of more than 5% points, which the carrier has delivered every quarter since the fourth quarter of 2012.
Saying it aims to maintain its ambition to be self-funded, which it has been achieving since 2013, it added that it is adjusting its growth target from “growing in line with the market to growing at least with the market to defend its market leading position.”
Maersk Line continued that it is executing on its $15-billion investment program announced in September 2014 to support growth targets. Additionally, it is adjusting its annual return target “from 8.5% ROIC to ROIC between 8.5% and 12.0%.”
Photo: Bahnfrend
