Maersk Line Help Boost Group's Q3 Profits

CEO Nils Andersen said cost cutting and rate increases have helped Maersk Line

A.P. Moller-Maersk Group (Maersk) said today it increased its third-quarter profits by 151 percent year-over-year to $933 million, despite a 5 percent decline in revenue to $14.6 billion, thanks partly to rate increases and cost-cutting efforts.

"We deliver a good result for the quarter considering the challenging economic environment," said Group CEO Nils S. Andersen.

"Thanks to our rate initiatives and cost reductions, Maersk Line is back in black figures year-to-date, and the high oil price supports a satisfactory result for Maersk Oil.

"We are expanding our terminals network in Latin America, Russia and other growth markets and expect our strategic initiatives to support both our returns and earnings stability as we move forward."

Maersk said its container services division, Maersk Line, and its oil and gas production business, Maersk Oil, did better than expected.

Maersk Line's profit for the quarter was $498 million, compared with a loss of $289 million in Q3 2011, and Maersk Oil had a profit of $243 million, down from $368 million due to a 23 percent decline in share of production, a lower average oil price, and a change in the decommissioning relief tax in the United Kingdom.

Within the shipping division, the company said continued slow steaming has led to a 14 percent decrease in bunker consumption per forty-foot equivalent unit year-over-year.

Maersk Line has used rate increases in recent months to improve its results, particularly on Asia-Europe routes.

For all of 2012, Maersk said it expects results of around $3.7 billion, up from $3.4 billion last year, including a modest positive result from Maersk Line thanks to higher average rates in the second half of the year.

"The outlook for 2012 is subject to considerable uncertainty, not least due to developments in the global economy," the company said.

Maersk has said it intends to shift its invested capital away from the shipping division, which now represents about 38 percent of the company's investment, and toward its oil, terminals, and drilling businesses.