Shipping gains buoy Moller-Maersk profit outlook

Maersk Line, the world's biggest container-shipping company, said it had moved back into the black yesterday, prompting its parent group AP Moller-Maersk to improve its full-year profit forecast.

The Danish shipping and oil group said a rise in freight rates had delivered a second-quarter net profit of US$227 million (Dh833.7m) for its container-shipping division, up from a net loss of $95m for the same period last year.

"The result is positive. They deliver the profit we had expected both for Maersk Line and for the group and we got the upgrade we had expected," said Jesper Christensen, an analyst with the Danish investment banker Alm. Brand. "That overshadows all else today."

The figures partially offset poor performances at Moller-Maersk's oil and terminals divisions, which drove the group's net profit down 19 per cent in the second quarter to $965m from $1.57 billion in the same period last year, slightly lower than the average forecast of $994mfrom analysts polled by Reuters.

The group now expects net earnings this year to be "slightly above" last year's $3.4bn result, having previously predicted a slight drop, said the group chief executive Nils Smedegaard Andersen.

"Container rates have been improved, Maersk Line is back in black figures and our other core growth businesses are executing well on strategy," he said.

The fall in group net earnings from the second quarter last year was partly caused by a one-off $700m gain last year from its sale of supermarkets in the United Kingdom.

The shipping industry has been hit by weaker demand due to the global economic slowdown and an oversupply of vessels in the past four years. However, the average freight rate was 4 per cent higher in the second quarter compared with the corresponding period last year and 14 per cent higher than in the first quarter this year, Maersk said.

But the group cautioned its outlook was subject to "considerable uncertainty, not least due to developments in the global economy".

Oil and gas earnings, hit by lower production, fell less than expected and the group maintained its forecast for its oil business results to be similar to last year.

dblack@thenational.ae

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