A.P. Moller-Maersk first half revenue up, container activities show loss
A.P. Moller-Maersk Group said revenue was up sharply in the first half of 2006 when compared to the same period the prior year, but said “container activities have shown an unsatisfactory loss.”
The entire company, which has interests in oil and gas and other industries in addition to containerized shipping, reported profit of $1.2 billion on revenue of $21 billion, compared to profit of $1.8 billion on revenue of $15.2 billion in the same period in 2005.
A.P. Moller-Maersk said revenue, costs, depreciation, amortization and financial items were affected by the acquisition of P&O Nedlloyd and oil interests from Kerr-McGee, which were included in its results starting Aug. 11, 2005 and Nov. 17, 2005 respectively.
Maersk Line is the largest containerized shipping company in the world. The company said, “it has not obtained a share of the general market growth during the first half year 2006” and that rates for container services “were on average approximately 5 percent lower including bunkers adjustment factor compared to the first half year 2005” when measured in dollars. It forecast in the second half of 2006 a similar weakness in rates.
In the first half of the year, the company said its container shipping and related activities sector had a loss of $607 million on revenue of $12.4 billion compared to profit of $871 million compared on revenue of $8.8 billion in the first half of 2005.
It also said results were hurt by highly increased costs for bunkers which were only partly compensated by bunkers adjustment factor.
“In the first half year 2006 the container activities have shown an unsatisfactory loss, while the other activities, in general, have shown satisfactory development in revenue as well as earnings.”
“Revenue was in particular positively affected by acquired activities in 2005 (including P&O Nedlloyd and oil activities in Great Britain), higher oil prices and a U.S. dollar exchange rate, which compared to DKK on average was approximately 5 percent higher than that in the first half year of 2005,” the company said.