A.P. Moller-Maersk issued the strongest sign yet of a turnaround in the shipping industry on Wednesday, forecasting it expects to turn a record profit of around USD$5 billion (NZD$6.4 billion) this year on surging ocean container volume and freight rates, according to the Journal of Commerce.
The parent of the world’s largest container ship operator said it earned a $4.2 billion net profit in the first nine months of 2010, a dramatic reversal from the $700 million the Danish transport and energy group counted in the same period a year ago. The gain included a $1.68 billion net profit in the third quarter ending Sept. 30.
“The result is exceptional, and we are very satisfied,” Nils Andersen, chief executive of the Copenhagen-based company was quoted saying.
Revenue in the nine months ending in September climbed 17% from a year earlier to $41.4 billion.
Ocean carrier Maersk Line accounted for more than half the group’s earnings in the first nine months, swinging to a $2.25 billion profit from a year-earlier loss of $1.59 billion.
Container traffic grew 7% in the first three quarters. to 10.8 million 20-foot equivalent units and average freight rates per 40-foot container surged 34% to $3,075.
“Markets have been favorable, but first of all, our businesses are in excellent shape,” Andersen said. “Especially our container business has improved and is ahead of the competition on profitability. We are ready to seize opportunities, especially in emerging markets.”
The forecast of a 2010 profit “in the order of $5 billion” was the third upward revision in four months, driven by higher ocean freight rates, and would top the company’s previous record profit of $4.69 billion in 2004, the report said.
Maersk Line is notifying trans-Atlantic customers of three increases in freight rates planned for 2011 on that trade lane.
Maersk said it expects a seasonal decline in both volume and freight rates toward the end of the year, which will result in a lower profit from the recent strong quarterly reports. – Source: Journal of Commerce