Maersk reports $5 billion profit

The A.P. Moller – Maersk Group last week reported a profit of $5 billion for 2010. It said the main factors were increased container rates and volumes, reduced costs per unit and an increased oil price.

“Our people have done a truly great job, and we can be very satisfied with the result,” said Group CEO Nils S. Andersen.

“Even if markets improved strongly in 2010, container rates and volumes were only at par with 2008. This means that the significant profit improvements stem from our own efforts to become more competitive,” Mr. Andersen added.

Dramatic improvement in container activities

The container activities delivered a profit of $2.6 billion for 2010. A dramatic improvement compared to 2009  and to the profit of only $205 million in 2008, where conditions were comparable to 2010.

The company says the improvements were a result of many efforts in the past few years to make Maersk Line more competitive. In 2010, unit costs were reduced by another 4% (excluding bunker costs), and bunker consumption per unit was reduced by an additional 10%.

In 2011, Maersk Line aims at winning back the market share it lost in 2010, “not through rate dumping, but by delivering a superior product as regards reliability, availability and customer service,” says Mr. Andersen.

Investing in future growth

Maersk Oil made a profit for 2010 of $1.7 billion compared to a profit of $1.2 billion in 2009. The main reason for the improved result was a 29% increase in the average oil price.

The oil production declined, but “we are making significant investments to replace our oil reserves,” say sMr. Andersen.

The Group in general invests in future growth. In the last couple of months alone, it has invested in oil fields in Brazil ($2.4 billion), new drilling rigs ($1.2 billion) and new, standard-setting container ships ($1.9 billion).

“Our focus is on growth, and thanks to our strong financial position we are able to make these investments. This underlines the necessity of our focus on maintaining and increasing financial flexibility,” says Mr. Andersen. “Looking ahead, we see strong potential in growth markets, where the number of middle-income consumers is booming. In 2011, we will focus the main part of our attention and investments in these markets, where we already have a strong presence,” says Andersen.