A.P. Moller-Maersk expects loss from container shipping in 2006
Denmark's A.P. Moller-Maersk Group, owners of the world's largest ocean carrier Maersk Line, said it expects its container shipping division to post a net loss of $600 million this year as a result of lower freight rates, higher fuel costs and the integration costs relating to its acquisition of P&O Nedlloyd.
Last year, Maersk's container services produced a net profit of $1.3 billion, but the Danish group said that freight rates have slumped 6 percent during the first nine months of this year while its fuel expenses have soared 35 percent.
On a positive note, Maersk said second-half cargo volumes have risen about 10 percent, and the P&O Nedlloyd integration costs in 2006 will be well below the previously expected $180 million.
For tankers, offshore and other shipping activities the net result for the full year 2006 is expected to be between $900 million and $1 billion after gains on sale of ships, compared to $600 million in 2005.
The net result for its oil and gas activities is expected to be about $1.7 billion, from $1.2 billion last year, thanks to the higher average oil prices, Maersk said.
Maersk maintained its full-year revenue guidance of DKK16 billion ($2.8 billion), down from the DKK20.2 billion posted in 2005.
'The expected result is still sensitive to changes in freight rates and volumes as well as in oil prices and exchange rates in the last months of the year,' Maersk said in a statement.
A.P. Moller-Maersk expects loss from container shipping in 2006
