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A P Moller-Maersk Group has posted a 2008 profit of US$3.4 billion, down from $3.5 billion in 2007.
Revenue was higher at $61.2 billion, compared to $51.2 billion the previous year, due mainly to high oil and gas prices and freight rate increases in the container business, although mostly the result of recovery on bunker surcharges.
Looking ahead to the group's performance in 2009, the company is predicting that excluding gains on sales of ships, rigs, etc., is expected to be significantly below 2008 which was $2.6 billion, the group said in a statement.
2008 was a turbulent year, and the global economic crisis had a negative impact on the group's assets and led to a number of write downs and value adjustments, said Nils Andersen, the group's CEO. Thanks to good progress in the operational result of the business units, the result stayed at the same level as last year, and cash flow from operations improved by $1.2 billion to $8.5 billion.
Last year, the company laid off 4,500 staff and closed a Maersk Line service centre in China at the end of the year. The company incurred $245 million in restructuring costs in its container business owing to implementation of its Streamline programme.
In 2008, Maersk Line generated a profit of $205 million, up from $106 million in 2007. Revenue for the liner carrier division was $28.7 billion compared to $25.9 billion in 2007.
Freight rates in 2008 rose on average 8 per cent against 2007 mainly because freight rates were high in the first half of the year. The carrier transported a total of 7 million TEU, an increase of 2 per cent year on year.
Average bunker prices surged by 51 per cent against 2007, while fuel costs rose by a lower 43 per cent because fuel consumption was reduced by 5 per cent.
The company is warning that in 2009 the outlook for container rates is extremely negative.
Mr Andersen said it is surely going to be a tough negotiation to increase rates. January volume was 20 per cent lower than the same month the previous year.
Maersk withdrew 40,000 FEU of weekly capacity from its Asia-Europe trades in second half of 2008, including eight x 6,500-TEU vessels in November.
The moves come as Asia-Europe volumes decreased by 2 per cent over the course of the year, despite a 1 per cent increase in the first half of 2008. Transatlantic volume was unchanged from 2007 and Africa volume rose up 8 per cent.
During the year under review, Maersk Line took delivery of 26 new vessels, sold nine vessels, including four that were chartered back on 10-year charters.
Maersk said its terminal operating arm, APM Terminals, will continue to invest significantly in ongoing projects, with increased focus on operational improvements at existing terminals.
APM's revenue for 2008 amounted to $3.1 billion, up 24 per cent year on year, while profit rose to $161 million, up from $106 million in 2007.
Maersk Logistics and Damco saw their combined profit increase to $53 million in 2008, up from $43 million in 2007.
Mr Andersen said: The additional capacity will give us a challenge and we must live with the fact that there will be significant overcapacity in the coming years. We anticipate that we won't be as affected.
However, he added that Maersk would still be affected by overcapacity in the worldwide box fleet.
Source: Schednet
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