Maersk Line profits grow

AUGUST 16, 2013 — “We delivered a good operational result for the quarter thanks to improved performance in most of our businesses. Maersk Line has made strong and consistent progress and is now an industry leader in terms of profitability,” said Maersk Group CEO Nils S. Andersen (left) as the company reported its second quarter results.

The Group delivered a profit of $856 million ($965 million) and a return on invested capital (ROIC) of 7.4% (8.9%) for Q2. Increased profit was achieved across all businesses except Maersk Oil and Damco as well as Maersk Tankers, which was negatively impacted by impairments and provisions of $280 million related to VLCCs. Significant improvements were seen in Maersk Line and Maersk Drilling, but Maersk Oil’s profit was reduced due to declining entitlement production and lower oil price while maintaining substantial exploration costs in order to expand the oil production portfolio.

Maersk Line made a profit of $439 million ($227 million) and a ROIC of 8.5% (4.6%). The significant improvement in the financial performance was achieved through lower costs.

Volumes increased 2.1%, average freight rate decreased13.1% and total cost per FFE decreased by 12.7%. The cost decrease was mainly driven by vessel network efficiencies and lower bunker price. Maersk Line’s total fleet capacity decreased by 0.9%.

“On a Group level,” said Mr. Andersen, “we seek to further advance performance and growth by establishing a fifth core business unit with a target of $0.5 billion by 2016.”

To be set up by January 2014, the new core business unit will be called “Services & Other Shipping” and will comprise Maersk Supply Service, Maersk Tankers, Svitzer and Damco.