Tuesday, August 14, 2012

Maersk raises 2012 earnings outlook with Q2 profit

Global shipping giant A.P. Moller-Maersk raised its earnings outlook for 2012 after swinging from an almost $600 million loss in the first quarter of this year to net profit of $965 million for the second quarter, as the company reported strengthening freight rates that it feels should continue into the year’s second half.

Maersk Line, which reportedly accounts for over 15 percent of the container-shipping market, turned an operating profit of $227 million for the second quarter compared to a loss of $95 million for the same period a year ago.

Maersk’s net earnings for the second quarter were down considerably from the same period a year ago when the company posted profit of $1.57 billion, however there is was a charge-off of $700 million from the sale of a supermarket chain in the United Kingdom last year.

"The important thing is that Maersk Line turned profitable," said Maersk Chief Executive Nils Smedegaard Andersen in a conference call.

Maersk Line reported its freight rates increased on average by 4.2 percent in the second quarter over the same period last year, and were 14 percent from the first quarter.

"We have a slower increase in our average rates than you see in the market, and particularly in the spot indexes," Andersen said.

"It's the yearly contracts that are giving us trouble," he said. "So we feel that, even if spot rates peak now, there is room for us to improve rates."

For the full Reuters story: in.reuters.com

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