JOC Staff | Feb 22, 2013 8:50AM EST
Maersk Line, the world’s largest container carrier, swung to a $461 million operating profit in 2012 from a $553 million loss in 2011 driven by higher freight rates and lower operating costs.
The $1 billion turnaround helped parent A.P. Moller-Maersk to post a better-than-expected net profit of $4 billion against $3.4 billion a year earlier.
“It was a hard year for the container market, so we are glad we made a profit in this segment,” A.P. Moller-Maersk CEO Nils Andersen said in announcing the results.
Maersk forecast modest demand growth of 4 to 5 percent in 2013 but says the outlook for westbound shipments from Asia to Europe is bleak. It expects traffic to grow in the U.S. trades and in emerging markets in Africa and Latin America.
But “without significant capacity adjustments, the container market is most likely to see a continued downward pressure on rates in 2013,” the Copenhagen-based company warned.
The Danish carrier’s revenue grew 8 percent in 2012 to $27.1 billion from $25.1 billion a year earlier, and container volume was 5 percent higher at 17 million 20-foot equivalent units, maintaining its 14 percent global market share.
Freight rates rose an average 1.9 percent for the year, to $1,440 per 20-foot container. Excluding bunker adjustment surcharges, average rates increased 4.6 percent to $1,137 as capacity was cut by idling ships, cancellation of sailings and slow-steaming.
The unit cost per container declined 1.7 percent to $1,527 to $1,554 due to lower bunker consumption and operational cost savings.
Maersk, which booked a $599 million loss in the first three months of 2012, returned to the black in the second quarter following a series of successful industrywide rate hikes. But the market softened through the second half, trimming profit in the fourth quarter to $335 million from $498 million in the previous three months.
