Maersk Line suffered an underlying loss of US$80m in the first quarter of 2017 although the carrier still expects to improve its underlying result by US$1bn over the calendar year due to higher freight rates.
Despite a 4.4% overall increase in freight rates, the shipping line’s results were hit by higher bunker costs.
Rates on the East-West trades picked up by 23% to US$2,112per feu although these gains were hampered by a 4.3% fall on the North – South trades.
In a conference call, Maersk’s chief financial officer, Jakob Stausholm affirmed his belief, that the container shipping industry has hit an inflection point with demand surpassing supply, which he previously stated in the last quarter of 2016.
According to Stausholm, annual contracts have been negotiated with customers at “substantially higher” levels but the effects will kick in during the second quarter.
Meanwhile, APM Terminals (APMT) recorded an underlying profit of US$91m, down by 15% when compared to the equivalent period last year.
APMT’s performance was negatively impacted by declining markets in West Africa and rate pressure in a number of locations due to overcapacity, noted a Maersk statement.
The terminal operator maintained its cost reduction strategy with no new terminal projects pursued.
Container throughput increased by 8.1% to 9.4m teu, which was largely attributed to the acquisition of Grup Maritim TCB.
Overall group capital expenditure commitments have fallen from US$9bn one quarter ago to US$8bn, noted Stausholm, pointing out that the emphasis is now on “capital discipline”.
As a whole, the group, including its Transport & Logistics and its Energy divsions, made an underlying profit of US$201m, in line with the same quarter last year.
“We cannot be satisfied with the overall level of profitability for the group,” said Maersk CEO Soren Skou.
“We are starting to see synergies in Transport & Logistics, for example with Maersk Line increasing volumes to APMT, improved collaboration between Maersk Line and Maersk Container Industry (MCI) leading to significantly higher volumes and improved results, as well as cost synergies on Sales, General & Administration,” he also noted.
In particular, MCI’s revenue increased by 117%, boosted by higher volume demand from Maersk Line.