A.P. Moller-Maersk issued the strongest sign yet of a turnaround in the shipping industry on Wednesday, forecasting it expects to turn a record profit of around $5 billion this year on surging ocean container volume and freight rates.
The parent of the world’s largest container ship operator said it earned a $4.2 billion net profit in the first nine months of 2010, a dramatic reversal from the $700 million the Danish transport and energy group counted in the same period a year ago. The gain included a $1.68 billion net profit in the third quarter ending Sept. 30.
“The result is exceptional, and we are very satisfied,” said Nils Andersen, chief executive of the Copenhagen-based company.
Revenue in the nine months ending in September climbed 17 percent from a year earlier to $41.4 billion.
Ocean carrier Maersk Line accounted for more than half the group’s earnings in the first nine months, swinging to a $2.25 billion profit from a year-earlier loss of $1.59 billion.
Container traffic grew 7 percent in the first three quarters. to 10.8 million 20-foot equivalent units and average freight rates per 40-foot container surged 34 percent to $3,075.
“Markets have been favorable, but first of all, our businesses are in excellent shape,” Andersen said. “Especially our container business has improved and is ahead of the competition on profitability. We are ready to seize opportunities, especially in emerging markets.”
The forecast of a 2010 profit “in the order of $5 billion” was the third upward revision in four months, driven by higher ocean freight rates, and would top the company’s previous record profit of $4.69 billion in 2004.
Maersk Line is notifying trans-Atlantic customers of three increases in freight rates planned for 2011 on that trade lane.
Maersk said it expects a seasonal decline in both volume and freight rates toward the end of the year, which will result in a lower profit from the recent strong quarterly reports.
APM Terminals, the terminal operating unit, almost doubled profit to $668 million from $340 million, partly due to the sale of a stake in a container terminal in Yantian, China. The number of containers handled rose three percent despite the closure of six terminals.
Maersk Tankers lost $103 million in the first nine months compared with a year-earlier loss of $193 million. The unit incurred impairment losses of $107 million in the third quarter.
Oil and gas profits increased to $1.34 billion from $958 million, mostly due to a 35 percent increase in oil prices to $77 per barrel.