Wednesday, August 17, 2011

Mixed Trading Figures From The World Number One Container Shipping Line

Freight Carriage Up but Rates Under Pressure
Shipping News Feature

DENMARK – WORLDWIDE – Whilst other container shipping companies produce figures which can best be described as OK and at worst gloomy the biggest boy in the gang, freight carrier Maersk Line remains somewhat sheltered by its presence within the AP Moller Maersk Empire which issued half year figures today, profits depending heavily on the group’s oil related revenues. Although TEU volumes were up 6% the average freight rates, including bunker surcharges, were 3% lower than in the same period last year.

Actual container tally came out at 3.8 million forty foot equivalent units (FFE) producing a profit of $0.4 billion compared to last years equivalent of $1.2 billion. For the group overall revenue increased by 9% to $29.9bn primarily due to higher oil prices and container volumes. Profit for the period was 8% higher at $2.7bn positively affected by divestment gain from sale of Netto Foodstores Ltd. UK of $ 0.7bn. The group annualised return on invested capital after tax (ROIC) remained steady at 12.8%.

Tankers, offshore and other shipping activities made a profit of $250million up from $171 million. The big earner for Maersk was in oil and gas activities with profits of $1.2 billion against last years equivalent period which showed a $0.9 billion, showing an ROIC figure of 54.7%. Maersk continue to be the world’s number one container carrier with a total fleet of 621 such vessels of which 376 are chartered.

The official company outlook will be of interest to freight professionals with the group expecting only modest container profits for the foreseeable future. Despite feeling that global demand for seaborne containers will grow by 6-8% in 2011 the global supply of new tonnage is expected to grow more than the freight volumes especially on the Asia to Europe trade. This rebalancing will doubtless lead to freight rates remaining under pressure with high bunker and time charter costs expected to continue to exert a negative impact on profit margins.