Copenhagen: Danish shipping and oil conglomerate A.P. Moeller-Maersk reported a 62 per cent rise in quarterly profit as it shipped more containers but for a lower average price.
Net profit for the group rose in the first three months of the year to $1.15 billion from $710 million, beating a Dow Jones analyst consensus of $1.05 billion, as earnings from container shipping line Maersk Line more than doubled to $454 million. Revenues climbed 0.9 per cent to $11.736 billion, falling slightly short of an analyst consensus of $12.0 billion. Maersk Line reiterated that global demand was expected to grow by four to five percent, but said it now believes its annual results will beat last year's due to ‘improved operational performance and utilisation’.
The Maersk group, which in January sold its supermarket business for a gain of $2.6 billion, raised its guidance for annual profit excluding discontinued operations, impairment losses and divestment gains to $4.0 billion from $3.6 billion. With a 15 per cent market share in global container shipping, the company is considered a bellwether for international trade. "Pressure from excess capacity is expected to remain throughout the year," Maersk said in a statement. The financial crisis has weighed on the international shipping market and the major routes between Europe and Asia have been particularly badly hit by overcapacity.
The group's shipping business has outperformed a troubled sector partly due to cost cuts, and last year it announced an alliance with two other major ocean carriers on routes between North America, Europe and Asia, called the P3 Network. The Danish company said it expects the alliance to start operations in "the autumn of 2014" rather than a previously stated goal of the middle of this year pending regulatory approval.
