A.P. Moller Maersk reported a record-setting $1.6 billion in profits for the first quarter, thanks in part to Maersk Line profits of $714 million.
A.P. Moller Maersk Group reported profits of $1.6 billion in the first quarter, up from $1.2 billion in the first quarter of 2014 and the highest recorded first quarter profits in the history of the company. Revenues were $10.5 billion in the quarter, down for $11.7 billion from the same period a year ago.
The Danish conglomerate expects to earn about $4 billion this year, said Nils Andersen, chief executive officer. In addition to Maersk Line, APM Terminals, and the forwarder Damco, A.P. Moller Maersk Group owns a mix of other businesses, mostly in the oil and gas and marine industries.
Anderson said record first quarter results reflected strong performance by Maersk Line and came despite the decline in oil prices that resulted in lower profit for Maersk Oil. He added that the company is upgrading its full year earnings forecast despite the recent sale of its 18.4 percent share of Danske Bank, the proceeds of which were distributed to shareholders as a dividend, and its divestment of Danske Supermarked.
Maersk Line
Maersk Line had net operating profits of $714 million in the first quarter, compared with $454 million in the same 2014 period. The increase came despite a decrease in revenue to $6.25 billion in the first quarter of 2015 from $6.46 billion in the first quarter of last year.
Container volumes in the first quarter were down 1.6 percent and Maersk Line noted the average freight rate was also lower when compared to the first quarter of 2014. But the company said it benefited from lower unit costs, including fuel.
In the first quarter of this year, Maersk Line transported about 2,207,000 FEUs at an average rate of $2,493 per FEU, compared with 2,243,000 FEUs at an average rate of $2,628 per FEU in the first quarter of 2014.
Maersk Line said the European and Africa markets were soft, and Andersen said the company has lost some market share in the Asia-Europe trade lane because it has not “followed the price war fully.”
Maersk said global container volumes were up just 1 percent in the first quarter, but that its fleet increased 10 percent to 2.9 million TEUs, 59 percent of which is owned by the ocean carrier.
Maersk Line had a unit cost of $2,449 per FFE compared with $2,612 per FFE in the first quarter of 2014. Anderson said that has been exclusively driven by the decline in the oil price because the company has been impacted by lower utilization of its ships.
In past quarters, Maersk Line has been good at adapting its fleet size to the expected demand, Andersen said, but did not do as well in the first quarter of this year. But he said the company plans to “attend to that” by increasing its market share again and through tonnage adjustments.
Anderson once again confirmed the company has no plans to speed up its ships despite the drop in fuel prices.
Maersk expects global demand for seaborne container transportation is expected to increase 3 percent to 5 percent this year and aims to “grow with the market” this year.
APM Terminals
APM had net operating profits of $190 million in the first quarter of 2015 compared with $215 million the year before.
Andersen noted that the terminal company operates in many countries where oil is an important part of their local economy and the low oil price has had a negative effect on cargo volumes at those terminals.
APM Terminals handled 9.1 million TEUs in the first quarter compared with 9.4 million TEUs in the same period of 2014, and the company said that this loss in volume was mainly due to the divestment of its terminal in Portsmouth, Virginia.
Andersen said the conglomerate continues to be committed to investing in APM Terminals.
Damco
Damco, A.P. Moller Maersk Group’s freight forwarding and logistics arm, had an operating loss of about $9 million in the first quarter compared with a loss of $10 million in the first quarter of 2014. Revenues were $683 million in the first quarter of 2015, 9 percent lower than the $749 million in revenues in the first quarter of 2014.
