A.P. Moeller-Maersk A/S, Denmark’s biggest company, reported first-quarter profits that missed analyst estimates after its shipping line lost market share.
Maersk Line, the world’s largest container line, reported a 57-per-cent jump in first-quarter net operating profit after tax to $714 million, missing the $783 million estimate in a survey conducted by SME Direkt.
Maersk Line, which transports about 15 per cent of the world’s manufactured goods, said that gains from lower fuel costs were dented by a decline in freight rates and volumes. The container industry has since 2009 suffered from over-capacity and freight-rate volatility after a slowdown in global trade coincided with a vessel building boom.
Maersk’s container line had “challenging market conditions and a less than satisfactory development in volumes and vessel utilisation”, the Copenhagen-based company said in a statement. The “strategy remains to grow with the market and also to ensure satisfactory vessel utilisation”.
The parent company’s earnings before interest, tax depreciation and amortisation fell 15 per cent to $2.57 billion, missing the average $2.7-billion estimate in a Bloomberg survey of seven analysts.
Average freight rates declined 5.1 per cent in the quarter and Maersk Line’s volumes decreased 1.6 per cent, as the company lost share in a market that grew about 1 per cent globally.
Maersk’s second-largest unit, its oil and gas producer, reported a 40-per-cent plunge in first-quarter net operating profit after tax to $208 million.
Bloomberg News, edited by ESM