Thursday, November 12, 2009

Maersk Suffers Heavy Losses Due to Terrible Shipping Rates

Company on Schedule for First Ever Loss
Shipping News Feature

DENMARK – A.P. Moller-Maersk, the Danish shipping giant, has reported that it has suffered a heavier than expected loss for the first three quarters of the year and has raised it projections for total losses for 2009 to $1 billion. This represents the company’s first yearly loss in its history.

Whilst Maersk’s gas and oil interests made money, these were wiped out by the losses suffered by its shipping interests, which have been massively impacted by the collapse in global shipping rates, traditionally half of the group’s income.

In its interim management statement the company says that in the first nine months of this year revenue has fallen to $35.3 billion, 25% lower than in the same period of 2008, which has resulted in a loss of $706 million as compared to a profit of $3.6 billion for quarters one-to-three last year.

Nils Smedegaard Andersen, the Groups CEO, said that: “As expected, the A.P. Moller - Maersk Group was still negatively affected by the challenging market conditions in the third quarter of 2009, particularly in the markets for the Group’s container vessels and tankers.”

However, the sheer size and diversity of the group’s business interest still means that it is likely to weather this storm in reasonable shape. As was reported in September, a massive share recapitalisation, assisted by austerity and efficiency cuts, have left Maersk with funding to consider purchases to further increase its holdings in the global container shipping market.