Damco slumped to a second quarter loss of $8 million from a $28 million profit a year earlier, as lower ocean container traffic more than offset strong growth in its air freight and supply chain management operations.
A.P. Moller-Maersk’s freight forwarding and logistics unit also reported a 5 percent decline in revenue to $758 million in the three months through June, down from $794 million in the same period in 2012.
The company booked a profit on the sale of the Ocean Blue warehouse in China but incurred significant costs in implementing a new operating system and consolidating operations.
Ocean container volume slipped to 199,503 20-foot-equivalent units in the second quarter from 202,965 TEUs a year ago but air freight shipments jumped to 51,066 metric tons from 45,465 metric tons.
Damco said it doesn’t anticipate a major improvement in market conditions but expects to post solid year-on-year improvement in its results from the fourth quarter onward.
Damco was one of only three A.P. Moller-Maersk businesses that lost money in the quarter. Maersk Line almost doubled profit to $439 million from $227 million, and APM Terminals earned $179 million against $160 million a year ago.
There was a first half loss of $2 million compared with a $35 million profit a year earlier as revenue edged up to $1.53 billion from $1.52 billion.
A.P. Moller-Maersk last week announced it is combining Damco, tug operator Svitzer, Maersk Tankers and Maersk Supply Service in a new core business unit.
Maersk said the new unit, Services & Other Shipping, will begin operations in January and will aim to book an annual net profit of $500 million by 2016.