Maersk Earnings Show Company Defying Market Headwinds
A.P. Moeller-Maersk A/S, owner of the world’s largest container line, said profit exceeded estimates despite a slump in freight rates.
Maersk Line said net operating profit after tax dropped 7.3% last quarter to $507 million, beating the $482 million estimate in a survey conducted by SME. Group net income fell to $1.07 billion, better than the median estimate of $729 million in a Bloomberg News survey.
It “is a relief” to see the numbers, Frode Moerkedal, an analyst at Clarksons Platou Securities, said in a note. “The figures beat both our, and consensus, expectations hands down” thanks to the company “recapturing volumes and good cost control.”
Maersk Line, which transports about 15% of the world’s manufactured goods, said costs fell about 13% per transported container last quarter. The division kept its full-year forecast amid a 14% plunge in freight rates.
“In a quarter impacted by lower average container rates and a lower oil price, the Maersk Group achieved a satisfactory result,” CEO Nils Smedegaard Andersen said in the statement.
The balance sheet “remains strong,” which will enable the company to buy back own shares for about $1 billion, he said.
The share buyback “shows clear commitment of distributing returns to shareholders,” Moerkedal said. “Our current recommendation is neutral, but is under revision.”
The container industry since 2009 has suffered from overcapacity and freight rate volatility after a slowdown in global trade coincided with a boom in vessel building.
Maersk Line sees 2015 underlying net profit growing from the $2.2 billion reached last year. The group, which also owns oil and drilling operations, kept its full-year forecast for an underlying net profit of about $4 billion.
