Maersk posts record $4 billion profit on container boom

Maersk posts record $4 billion profit on container boom    The A.P. Moller-Maersk group today announced a record DKK24.4 billion ($4.2 billion) net income for 2004, 41 percent more than its DKK17.3 billion result for the previous year — a performance it credited largely to improved results from Maersk Sealand.
   The improved earnings were “mainly due to higher rates for the container services and higher crude oil prices,” A.P. Moller-Maersk said.
   Compared to 2003, the result was in particular positively affected by increased volumes and rates for the container services and higher rates for the tankers, higher oil prices and lower write-downs on fixed assets.
   A.P. Moller-Maersk’s group revenue, including container shipping, terminals, tanker shipping, oil and gas extraction, shipyard and retail activities, rose 6 percent to DKK166 billion ($28.9 billion) last year, from DKK157.1 billion. Group operating income jumped 36 percent to 29.5 billion ($5.1 billion).
   Container shipping and related activities more than doubled net earnings to DKK8.4 billion ($1.5 billion) from DKK3.9 billion in 2003. Revenue from container shipping and related activities rose 6 percent in local currency to DKK94.7 billion ($16.5 billion), from DKK89 billion. As with several other major container carriers, profits rose much faster than revenue in 2004.
   “For Maersk Sealand, transported volumes and rates rose appreciably,” the Danish parent company said. “This was partially offset by increasing expenses for chartered tonnage and fuel and effect of the lower U.S. dollar exchange rate. The result was considerably above that of 2003.”
   Another affiliate, Safmarine Container Lines, also had increased activity and a result “considerably above that for 2003,” the group added.
   A.P. Moller-Maersk confirmed that 2004 was the first year that container shipping and related activities were the largest profit-making division of the group since it started announcing results by segments in 2002.
   Commenting on group expectations for 2005, A.P. Moller-Maersk said its revenue is expected to be about 5-10 percent higher than 2004 (DKK166 billion), and the result before special items but after tax is expected to be in the order of DKK20 billion. At exchange rates at the 2004 level, the expected result for 2005 would be somewhat higher than 2004 (about DKK 20.5 billion).