Maersk Sealand paces Moller growth

Maersk Sealand paces Moller growth

A.P. Moller Group, the diversified shipping, industrial and energy group, on Tuesday said a weak dollar held back growth in first-half profit but forecast that full-year earnings will rise 15 percent on increased cargo volume and higher freight rates at Maersk Sealand.

The Danish company reported net profit of 9.3 billion kroner ($1.1 billion] in the six months to June 30 from 9.0 billion kroner ($1.0 billion) a year earlier. Revenue inched up 1.6 percent to 76.5 billion kroner ($10.0 billion).

The group said the exchange rate of the dollar -- the currency used for freight rates and oil prices -- against the krone was on average 19 per cent below that of the first half of 2002, producing a "substantial negative" effect on its results.

Container shipping and related activities produced the best result, soaring to a net profit of $212 million from $9.6 million a year earlier. Revenue jumped 16.7 percent to $6.3 billion. Average freight rates increased during the period from a low and unprofitable level in the first half of 2002 but the dollar's weakness reduced rates in kroner by around 12 percent.

Maersk said its South African unit, Safmarine Container Lines, posted declining results due to lower gains from the sale of ships and unfavourable exchange rate movements.

Maersk Sealand agencies profited from rising traffic and freight rates and increased trucking and warehousing/depot activities to improve their performance. Maersk Logistics also turned in better results.

Net profit from tankers, tramp and offshore shipping slid to $154 million from $213 million a year earlier. Revenues from those operations declined 13 percent to $951 million.

Maersk Sealand said it expects full-year, after tax earnings to rise 15 percent above 2002's $1.2 billion if freight rates, oil prices and the dollar-krone exchange rate remain at current levels.

Analysts tracking the group are more bullish saying the recent strengthening of the dollar and signs of a firmer economic revival in the U.S. could boost 2003 profits by as much as 30 percent to around $1.6 billion.