Maersk Cautiously Upbeat On Freight Rates As Profit Ticks Up
May 16 2012 - 3:14AM
Dow Jones News
Danish shipping and oil conglomerate A.P. Moller-Maersk A/S
(MAERSK-B.KO) Wednesday said it expects shipping rates to continue
the recovery since March as its container shipping arm recorded a
smaller loss than expected in the first quarter.
Maersk said it still expects full-year 2012 net profit to come
in slightly lower than last year as Maersk Line, the world's
largest container shipping company, continues to struggle with
over-capacity and low freight rates. Still, it struck a more upbeat
tone.
"Maersk Line expects a negative to neutral result in 2012, based
on the expectation that the improvement in freight rates since
March will continue," Maersk said, though it cautioned that the
expectations are sensitive to changes in the shipping market and
world economy. Previously, Maersk had pegged Maersk Line's
full-year result to be negative.
"Global demand for container capacity is expected to rise by 4%
to 6% in 2012, less on the Europe-Asia routes, but supported by
growth in the North- and South-bound routes," Maersk said.
The company's first-quarter net profit, including minority
interests, rose to 6.67 billion Danish kroner ($1.14 billion) from
DKK6.35 billion a year earlier. Analysts polled by Dow Jones
Newswires had forecast average first-quarter net profit including
minorities at DKK1.66 billion.
The group's net profit attributable to shareholders rose to
DKK6.15 billion, from DKK6.08 billion, helped by a significantly
lower tax rate and a 2.7% increase in first-quarter sales to
DKK81.25 billion as higher oil prices and market share gains in the
shipping business helped boost revenues. Still, Maersk Line
reported a loss of DKK3.4 billion in the period.
Maersk's first-quarter results are the first it has published
since the death of the group's patriarch Maersk Mc-Kinney Moller a
month ago. Moller, the son of company founder Arnold Peter Moller,
was a former CEO and chairman well-known for his tight grip of the
family-controlled group despite having no formal day-to-day
supervision of its activities for more than a decade.
Investors believe it now could become easier for the company to
make decisions such as splitting shares and selling non-core
assets, most notably Maersk's retail grocery business and its 20%
stake in Denmark's largest lender, Danske Bank A/S (DANSKE.KO).
A.P. Moller-Maersk shares closed Tuesday at DKK43,120, valuing
the company at DKK177.23 billion, down around 10% in the last three
months.
-By Flemming Emil Hansen, Copenhagen Bureau, Dow Jones
Newswires; +45 33 12 44 88; flemming.hansen@dowjones.com
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