Danish shipping giant hit by fall in freight rates, lower oil prices
AP Moller-Maersk, the world’s biggest shipping firm, said the container business on which it was staking its future had made a loss in the last three months as freight rates declined further.
Shares in the Danish company fell 9% after third-quarter profit fell 44% and came in below forecasts.
Low oil prices have depressed returns from the energy business which is the other main arm of the company.
The results underline the problems facing the family-controlled group which said in September it would focus its attention on building up its transport and logistics business, while creating a separate energy division.
The company stuck to its forecast for annual profit to be significantly below last year’s $3.1-billion (R41.7-billion).
“This is far from a satisfactory result for us,” Soren Skou said.
He was appointed chief executive of the group in June and still heads the container business.
“We grew more than the market and gained some market share in the third quarter,” he said.
Maersk had managed to increase market share following the collapse of South Korea’s Hanjin Shipping.
However, average freight rates fell 16% in the quarter to $1 811 (R21 363) per 40-foot container as overcapacity hurt shipping companies.
A net loss of $116-million (R1.56-billion) for its container unit, against analysts’ expectations of a $174-million (R2.345-billion) profit, shows the pressures as it seeks to remain the world’s leading container carrier amid a wave of mergers and acquisitions.
Recent deals have involved China’s Cosco, France’s CMA CGM and Germany’s Hapag-Lloyd. Japan’s top three shipping firms Kawasaki Kisen, Mitsui OSK Lines and Nippon Yusen said on Monday they planned to combine their container shipping operations in a joint venture that would have $19-billion (R256.4-billion) in combined revenues and control 7% of global container capacity.
Maersk has a market share of about 15% but has not been able to secure better prices for shipping goods.
With a fleet of more than 600 ships, it intends to develop its transport and logistics operations despite its problems, while creating a separate energy division combining Maersk Oil and three related companies. – Reuters