Maersk fires profit warning

The world’s biggest container line downgraded its profit expectations for 2015 by 27 percent Friday, saying the market won’t recover this year from weaker demand and deteriorating rates.    Maersk Line on Friday significantly downgraded its expected profits in 2015 due to a container shipping market that the company said has been deteriorating since the end of the third quarter.
   The Danish line, the world’s biggest by fleet size, is now forecasting profits of $1.6 billion in 2015, down from its previous full-year estimate of $2.2 billion.
   “The container shipping market has deteriorated beyond the Group’s expectations,” Maersk said in a statement. “The Group does not expect market recovery in 2015. As a result of the market circumstances, initiatives have been taken to adjust Maersk Line’s network accordingly.”
   Maersk cited freight rates that dropped from an average of $2,679 per FEU in the third quarter of 2014 to $2,163 per FEU in the same quarter this year.
   Maersk’s guideline is that a general decline in its freight rate of $100 per FEU impacts Maersk Line negatively by around $500 million in profit, and that a volume reduction of 100,000 FEUs have a negative impact of around $100 million. Maersk said its third quarter volume rose marginally, to 2.42 million FEUs.
   “It is regrettable that we have to adjust our expectations for the 2015 result,” A.P. Moller-Maersk Group Chief Executive Officer says Group CEO Nils Andersen. All of our business units delivered a positive result in the third quarter, despite difficult conditions across our industries.”
   A.P. Moller–Maersk Group, which includes container terminals, logistics, and oil and gas units, is now expecting a $3.4 billion profit in 2015, down from the previous estimate of $4 billion.