Improved Bunker Efficiency Helps Maersk Line to Higher Profit

MV Mary Maersk departing Algeciras, Spain on July 21, 2014 with a world record 17,603 TEI of cargo

A.P. Moller-Maersk (Maersk) raised its forecast for full-year profits as its Q2 profit rose 169 percent to $2.3 billion.

Shipping division Maersk Line increased its profit to $547 million from $439 million thanks to improved bunker efficiency and a 6.6 percent volume increase, despite a 2.7 percent decline in revenue per forty-foot equivalent (FFE).

Chief Executive Nils Andersen attributed the positive Maersk Line results, despite continuing overcapacity in the global container fleet, to the company's improved use of its vessels, the Wall Street Journal reports.

"We have had a rather limited development in our capacity and volume growth above 6%," he said.

"The large increase in volume is due to the fact that we are competitive but also because the Asia-Europe trade is growing more than the rest of the world trade and we are the biggest on Asia-Europe [routes]."

The group's overall revenues rose 2 percent to $11.9 billion, and the quarterly results got a $2.8 billion boost from the company's sale of the majority share of Dansk Supermarked Group.

Maersk raised its outlook to about $4.5 billion for 2014, up from a previous forecast of $4 billion, and announced it will buy back shares worth 1 billion over the next 12 months.

Moving forward, the company said it expects continued efficiency increases for Maersk Line thanks to its planned 10-year vessel-sharing agreement with Mediterranean Shipping Co. (MSC).

The 2M alliance is now being developed and requires approval from U.S. authorities to move forward.