Saturday, August 27, 2011

Maersk Invest in Container Freight - But Logistics Must Move With The Markets

Danish Company Cuts to the Core
Shipping News Feature

DENMARK – WORLDWIDE – This week saw freight and energy giant AP Moller Maersk produce half year figures and the group are quick to point out the way the business is being developed. Container shipping and terminal handling facilities are said to be the main focus for investment within the seven shipping sectors that the group undertakes with others, such as tankers, logistics and towing and salvage, taking a back seat and relying on the influence of trade fluctuations, as opposed to leading the market.

These days of course Maersk are about much more than shipping, in the past year Maersk Oil has invested $ 3.4 billion on acquiring SK Energy's Brazilian assets and the sanctioning of the Golden Eagle development (GEAD) which will see up to 24 North Sea oil wells come on stream in the North Sea. Maersk Drilling is intended to become one of the leading drilling contractors within deep water and ultra harsh environments and expected by management to become a significant and stable contributor to Group profits.

The news means Damco, the logistics arm, and Svitzer, Maersk’s salvage subsidiary will have to ensure their own future prosperity and the group’s strategic minority holding in Danske Bank will be retained. The liquid natural gas subsidiary Maersk LNG is to be disposed of ‘as it lacks the scale to be a leading player ‘, according to the half year report.

Meanwhile Maersk Line needs to find the cargo to ensure its profitability following the company commitment shown when ordering the twenty Triple-E class container vessels it has on its books, a liability of $3.8 billion in total which is in addition to the $1 billion committed to the operations of APM Terminals which has taken over three new port operations in Callao (Peru), Poti (Georgia) and Monrovia (Liberia). Maersk say these investments mean that in the first half-year of 2011 alone the Group has executed and committed to new investments of more than $12 billion.

Group CEO Nils S. Andersen said in the report:

"We are investing in a strong and exciting future for the Group and its employees. We want to strengthen our market positions even further, especially in growth markets, and our focus will primarily be on seven core businesses within two industries, shipping and oil & gas.”