Maersk Line faces losses of about USD 600 million

Maersk Line announced an operating loss of USD 599 million during the first three months of this year.

Maersk Line reported an operating loss of nearly USD 600 million for the first quarter of the year, more than the ocean carrier lost in the whole of 2011. The shipping line? poor start to the year effectively wiped out the first quarter profits of its parent company, AP Moller-Maersk, which released its interim results yesterday.

However, Maersk Line upgraded its forecast for 2012 from a negative up to neutral result, based on the assumption that the rate restorations that have been taking place since March 2012 will continue.

Despite the shipping line? revenue growing 7% from USD 5.9 billion to USD 6.3 billion during the three-month period, Maersk posted a net operating loss after tax of USD 599 million as collapsing freight rates on the key Asia-Europe route outweighed double-digit growth in container volume. The shipper recorded a USD 424 million profit during the same period in 2011.

Maersk? box traffic grew by 18% to 4.4 million TEU, while the average freight rates fell 9% to USD 2,646 per FEU, representing a loss of USD 263 on each transported container compared to a USD 217 profit a year ago. The first quarter losses compares with a USD 602 million loss for the whole of 2011, and what was a record profit of USD 2.6 billion in 2010.

The Danish-based carrier said that the outlook for the rest of the year is very sensitive towards changes in the market balance. Global demand for seaborne containers is expected to increase by between 4~6% in 2012, with lower increases on the Asia - Europe trades, but higher increases on the North - South trades.

APM Terminals, the group? port operating arm, however, faired much better in the first quarter as profits surged from USD 141 million to USD 235 million, supported by after tax divestment gains of USD 73 million.

Revenues rose by 1% to USD 1.2 billion from USD 1 billion in the previous year, while volumes also increased by 10% to 8.6 million TEU. APM Terminals said that for 2012 it expects a result above 2011 and above market growth in volumes supported by its portfolio expansion.

Group profits in the first quarter of the year rose by 1% to USD 1.2 billion, despite a fall in company revenues of 1% to USD 14.3 billion. However, if the group? divestment gains and one-off income of USD 900 million from a settled tax dispute in Algeria are excluded, then the group? profits would stand at around zero. < Korea Shipping Gazette >