Poor Freight Rates Instrumental in Q3 Profit Decline of Nearly 50% for Maersk

Monday November 9, 2015

Nils S. Andersen, CEO of Maersk Groupsaid that historic low freight rates and low oil prices were primarily to blame for a dramatic decline of nearly 50 percent in profits for the third quarter of 2015, but that an expected underlying result of about $3.4 billion for 2015 overall "reflects good performance in very challenging oil and container shipping markets."

Maersk posted a profit of $778 million for Q3 2015, compared to $1.5 billion in the period last year, with an underlying profit of $662 million, down from $1.3 billion in 2014.

However, he added that an anticipated year total of $3.4 billion "Is a delivery we're doing in a year where the forces from outside are really, really tough."

Despite the downbeat result, Andersen said that Maesrk is taking appropriate steps to maintain an ability to pursue business opportunities: "We are reducing costs and also stopping our investments a little bit, not because we're afraid of not earning enough money, but because we're readjusting and evaluating what the long term growth is going to be – and we don't want to order more capacity than what we need."

But while Andersen stressed that looking for ways to improve is ongoing,  "All of our business units are profitable, which is quite an achievement."

Referring to the underlying growth of the volumes handled by Maersk, Andersen said, "We've seen a massive gain of 30 percent or more in the amount of containers we transport or handle at our terminals, and in the last three years we've seen oil production coming back up.

"The businesses we want to grow we're growing, and doing it quite successfully."

In August, Clarksons Platou Securities AS credited Maersk Line for reclaiming its share of the global container freight shipping market by aggressively lowering rates to win a price war.