A.P. Moller-Maersk’s container shipping unit profits up 30%

A.P. Moller-Maersk’s container shipping unit profits up 30%    Denmark’s A.P. Moller-Maersk, which owns Maersk Sealand, the largest containership operator, reported Thursday that net income of its container shipping and related activities jumped 30.2 percent to DKK5 billion ($871 million) after the first six months of 2005. Net income in the first half of 2004 was DKK3.87 billion.
   A.P. Moller-Maersk’s container shipping and related activities include Maersk Sealand, Safmarine Container Lines, Maersk Logistics and APM Terminals. A.P. Moller-Maersk did not include recently acquired P&O Nedlloyd’s results in the first half results.
   The profit boost from container shipping and related activities contrasts with the group’s modest 5.5-percent rise in net result to DKK10.8 billion ($1.85 billion) for the first half, from DKK10.2 billion in the same period last year. Group revenue increased 12 percent to DKK88 billion ($15.2 billion) from DKK76.9 billion reported after the first six months of 2004.
   Profit from A.P. Moller-Maersk’s oil and gas extraction activities — the group’s second-largest profit contributor — was up 13.7 percent to DKK4.1 billion ($713 million) in the first half. Net profit from tankers and offshore shipping activities rose 22 percent to DKK1.6 billion ($274 million). The net result of the group’s retail arm slumped 34.7 percent to DKK546 million ($94 million).
   “The growth in world trade continued in the first half year 2005 and led to increased volumes and freight rates compared to the same period in 2004,” A.P. Moller-Maersk said in a statement.
   A.P. Moller-Maersk said demand for vessel capacity exceeded the growth in the world fleet. “As a consequence rates for chartered container vessels increased from an already high level; also fuel prices rose resulting in increased operating expenses for the shipping lines. The lower U.S. dollar exchange rate also contributed to increased costs,” it added.
   A.P. Moller-Maersk does not disclose financial results for its individual container lines, but said the “total result before tax for Maersk Sealand’s container services was well above that of the first half year in 2004.” For Safmarine, the group reported, “increased revenue had a result somewhat above that of the corresponding period in 2004.”
   Maersk Logistics’ “activities grew moderately and the result was below that of the first half year 2004,” A.P. Moller-Maersk said.
   Results for the group's port arm APM Terminals were flat, A.P. Moller-Maersk said.
   A.P. Moller-Maersk said it expects the restructuring and integration costs related to the takeover of P&O Nedlloyd to negatively impact its full year results by approximately DKK1.5 billion ($248 million). Nevertheless, it anticipates “the result for the year of the container activities in total ' to be above that of 2004,” and total group revenues to rise 25 percent above last year’s DKK 162 billion ($27.4 billion).
   It did add a note of caution when it said: “Uncertainty about the result for 2005 is especially related to freight rates, oil prices and exchange rates.”