Maersk rides a wave of profitability

AP Moller-Maersk expects profits to beat US$4 billion this year, buoyed by a 20 percent growth in revenues in the first half primarily from higher freight rates and volumes for the group's container shipping activities.

The Danish shipping giant reported net profit of $2.5 billion in the first half compared to a $500 million loss in the same period of 2009.

"The first half of 2010 has been very satisfactory for the group, and we expect a full year profit in excess of $4 billion," said CEO Nils S. Andersen.

"The container market has improved beyond our expectations, and our own efforts to improve competitiveness are paying off."

Despite the rapid turnaround in profitability, Andersen was cautious on prospects for the rest of this year and 2011.

"We still view the development in the global economy as uncertain, and this may affect us from the last quarter of 2010."

During the first half of 2010, the container shipping market was positively affected by stronger activity in global trade, Maersk said in a statement.

Freight rates and volumes for the group's container shipping activities were surprisingly positive, up 31 percent and 11 percent, on the same period of 2009.

"The group continues to focus on reducing costs, and further cost-cutting initiatives in the order of $500 million have been launched in 2010."

In the first half of 2010, the Group sold the ownership interest (13.7 percent) in Sigma Enterprises Ltd., which owns an interest in Yantian International Container Terminal, at a profit of $423 million before tax.

The sale of Norfolk Holdings B.V. to DFDS A/S was completed on 12 July 2010. Furthermore, an agreement on the sale of Netto UK (Netto Foodstores Limited) to Walmart (Asda Stores Limited) was signed. The transaction is expected to be completed in November 2010.
(Source:www.cargonewsasia.com)