Home » Breaking News, Maritime » Maersk Line’s Q1 sees net loss of $599 million

Maersk Line reported a net loss of US$599 million in the first quarter of 2012 from a profit of $424 million year-over-year, as average freight rate declined by 9 percent from the same period last year.

Maersk Line, the container shipping arm of Danish oil and shipping group A.P. Moller-Maersk, reported an increase in volume of 18 percent in Q1 of 2012 versus Q1 of last year.

For the same period, the A.P. Moller-Maersk group delivered a profit of $1.17 billion, 1 percent higher year-over-year, despite a 1 percent drop in revenue to $14.3 billion. But excluding divestment gains and one-off tax income from the settlement of an Algerian tax dispute, the group recorded zero profit.

“Although most of our businesses deliver good results and the Group’s net result is on a par with last year, we are not satisfied with the Group’s operational performance for the first quarter. Earnings in shipping were weak due to the continued loss-making rates in the container and tanker markets,” said group CEO Nils Andersen.

But he added that efforts to increase container rates are “paying off” and Maersk Line will continue initiatives to improve rates throughout the year.

Maersk Line announced a general rate increase on the Asia-Europe trades effective from March 2012, supported by a 9 percent reduction in capacity mostly from a reduction of the average speed.

The world’s biggest container shipping line expects a “negative up to neutral result” in 2012, assuming that the rate restoration effort will continue. “The outlook is very sensitive towards changes in the market balance,” a company press statement added.

Global demand for seaborne containers is expected to increase by 4 percent to 6 percent in 2012, with lower increases on the Asia-Europe trades but higher increases on the North-South trades, it added.

Meanwhile the group’s global port operator, APM Terminals, showed a profit for the first-quarter period of $235 million from last year’s 141 million. Despite declining volumes in Europe, overall throughput increased by 10 percent, driven by growth markets and new terminals.

EBITDA margin declined to 22.7 percent for the period from 23.3 percent in the first quarter of 2011.

APM Terminals expects a result above 2011 and above market growth in volumes, supported by portfolio expansion.

For 2012, A.P. Moller-Maersk Group expects results to be slightly lower than the $3.4 billion reported in 2011. “The outlook for 2012 is subject to considerable uncertainty, not least due to developments in the global economy,” the company said.

 

Photo: Maersk Line

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