Bruce Barnard, Special Correspondent | Aug 14, 2012 8:30AM EDT
Maersk Line rebounded to a $227 million profit in the second quarter from a $95 million loss a year ago and a record $599 million deficit in the previous three months as higher container volumes and ocean freight rates led to an upgrade of its full-year earnings guidance.
The world’s biggest ocean carrier now expects a “modest positive” result in 2012 on higher rates in the second half, up from parent A.P. Moller-Maersk’s “negative up to neutral” forecast in May and a predicted loss in February.
Container volume grew 11 percent in the second quarter to 4.4 million 20-foot-equivalent units, and the average freight rate increased by 4.2 percent to $3,014 per 40-foot container.
The Danish carrier implemented further rate hikes on most trades in the second quarter, backed up capacity reductions. A 10 percent increase in the bunker price was partly offset by an 8 percent reduction in fuel consumption.
Global demand for ocean containers is expected to increase by 4 percent in 2012, but with declining inbound European volumes, the Copenhagen-based carrier said, cutting its forecast from an earlier estimate of 4 to 6 percent growth.
Maersk will “definitely” continue to increase freight rates in the second half even if volumes are “unexciting” and spot rates peak, A.P. Moller-Maersk CEO Nils Smedegaard Andersen said.
There will be “very limited” fresh investment in Maersk Line in the short and medium term as the carrier has sufficient capacity coming on stream, including its 20 Triple E 18,000-TEU ships, Andersen said.
The first quarter loss pushed Maersk Line $372 million into the red in the first half compared with a $304 million profit in the year-earlier period.
A.P. Moller-Maersk’s second quarter profit declined 39 percent to $965 million from $1.57 billion 12 months ago, and revenue shrank 1 percent to $15.35 billion.
Contact Bruce Barnard at brucebarnard47@hotmail.com.