Maersk Line: 2015 Q2 Net Profit Down 7.3% Year-on-Year

Despite a weaker 2015 Q2 year-on-year and a challenging market, Maersk Line promises to retain their lead position in the global box market.

Maersk Line Friday announced that their net profit it 2015's second quarter was down 7.3 percent year-on-year to $507 million, citing plunging freight rates on the Asia-Europe trade, but promising to hold their lead position in the global container shipping market.

Maersk Line reported the result for 2015's first half as $220 million higher than the same period during 2014 as a result of lower costs, but notes that it expects the market to remain challenging.

"We expect the market to remain weak. We expect - with continued over-capacity - the rates to remain under pressure. We expect global container demand in 2015 to grow by 2-4 percent against a previous expectation of 3-5 percent," stated Maersk Line.

"We will continue to actively adjust our network, hereunder reduce capacity, to match the market demand."

JOC reports that this is Maersk Line's first year-over-year decline in quarterly profit since 2012, noting that the liner's decline and falling oil prices have played a role in Maersk Group reporting a decline in second quarter year-over-year net profit that was down 52 percent.

Maersk Line's indicates that its total costs fell by 10 percent alongside a volume increase of 3.7 percent, said to be a sign of gains that can be realised through utilising larger, and more fuel-efficient vessels.

"We have built a business which remains profitable despite fierce competition, falling rates and wavering demand. Driven by our low cost position, we continue to lead the industry on profit and margins," said Søren Skou, CEO of Maersk Line.

"I am convinced we can do more and in the coming years grow our business at least in line with the market. We have the people and we have the assets. Most importantly, we continue to improve and deliver the services our customers want.

"I am satisfied with our first half year result and return on invested capital. Our strong financial performance is the result of our cost leadership strategy," added Skou.

"It has proven to be the right strategy, especially at a time with very tough competition, falling rates and stagnating demand."

In May, Maersk Line said it was prepared to withdraw services in order to make up for a drop in utilization.