Maersk Line results boost parent's Q1 earnings
A.P. Moller-Maersk, the Danish conglomerate that owns Maersk Line, APM Terminals, Damco and other businesses, reported a profit of $1.2 billion for the first quarter of 2014, compared with the $790 million it earned in the same period in 2013.
Revenue was $11.7 billion in the first quarter of 2014 compared to $11.6 billion in the first quarter of 2013.
Nils Andersen, the group chief executive officer of A.P. Moller-Maersk, said the first quarter results reflected “very strong progress” at the Maersk Line subsidiary.
The company said it expects the results of Maersk Line to be better than in 2013, driven by improved operational performance and vessel utilization. Global demand for container transport is expected to grow by 4 to 5 percent and the company said Maersk Line seeks to grow with the market. Pressure from excess capacity is expected to remain throughout the year.
Maersk Line. Maersk Line had profit for the first quarter of 2014 of $454 million, up 122.5 percent from the same period in 2013.
Revenue was $6.46 billion, up 2.4 percent, with a 7.3-percent increase in volume offset by a 5.1-percent decline in freight rates.
Maersk Line said it was able to reduce its cost base by $144 million. It said unit cost was reduced by 9 percent, or $259 per 40-foot equivalent unit (FEU) to $2,612 per FEU.
The reduction in cost came about both from efficiencies in the Maersk network and a 7.2-percent decline in bunker fuel prices.
Andersen said that Maersk’s fleet capacity grew only 2.2 percent during the quarter to 2.7 million TEUs, which he said was less than the market. With the 7.3-percent increase in volume, he noted that Maersk Line has seen an improvement in capacity utilization.
Andersen noted that the startup date for the P3 Network that Maersk is planning to form with MSC and CMA CGM has been postponed from the second quarter of this year to this fall. He noted the U.S. Federal Maritime Commission has said the P3 can move forward and approvals by European and Chinese authorities are expected around midyear. But, he said regulatory approval by other countries may take longer and the P3 members would like those approvals before the network is put in place.
APM Terminals. APM Terminals had a profit of $215 million, nearly 30 percent more than the $166 million in the first quarter of 2013. Revenue was $1.1 billion, up 5 percent from the same period in 2013.
APM Terminals benefited by a 9-percent increase in volume as new terminals became fully operational, notably the APM Terminal facility in Santos, Brazil. The company said its volumes grew more quickly than the global market, which saw container volumes rise 4 percent.
APM Terminals adjusted its portfolio of terminal holdings, he noted, investing in new terminals and expansion in South American and Africa, while selling partial stakes in some facilities — 50 percent of its terminal in Elizabeth, New Jersey; 29 percent at its terminal in Callao, Peru; and 24 percent of its terminal in Zeebrugge, Belgium.
Damco. Damco, the company's forwarding and logistics subsidiary, had a net operating loss of $10 million in the first quarter compared to a profit of $6 million in the first quarter of 2013. Damco had revenue of $749 million in the first quarter compared to $773 million in the first quarter of 2013.
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