Maersk upbeat on container market, augurs well for economy
COPENHAGEN (Reuters) - Danish shipping and oil group A.P. Moller-Maersk (MAERSKb.CO) raised its earnings forecast after a strong third quarter, pointing to an upturn in the container shipping market that should augur well for the global economy.
The group's Maersk Line unit, the world's largest container shipping line and accounting for about 50 percent of group revenue, said its transported volumes rose 11 percent in the third quarter.
The business is seen as a bellwether for the global economy as its vessels make up around 15 percent of the world's container shipping capacity.
"The global market showed encouraging growth of around 5 percent in Q3... showing early indications of demand picking up," Maersk said on Wednesday in its earnings report.
Maersk Line's revenues fell to $6.78 billion, hit by a 12 percent year-on-year drop in freight rates.
But net profit rose 11 percent to $554 million, exceeding average forecasts of $521 million in a Reuters poll thanks to cost cuts and lower fuel prices, Maersk said.
Sydbank analyst Jacob Pedersen said the report reflected early signs of an improvement in the global economy.
"It seems that there is light at the end of the tunnel," he said.
STEADY AS SHE GOES
Chief executive Nils Smedegaard Andersen told reporters on a conference call that he did not expect annual growth in the global container shipping market to exceed 5 percent in the coming years.
"We want to grow with the market," he said. "We are not interested in gaining market share in a low-cost situation".
Maersk raised its forecast for full-year group net profit to around $3.5 billion from around $3.3 billion and reiterated it expected Maersk Line to easily beat last year's figure of $461 million.
"Maersk Line's development in transported volumes is better than expected," analyst Jesper Christensen from Alm. Brand Bank said.
Group net profit rose to $1.20 billion from $933 million, also above a Reuters poll forecast of $1.09 billion.
Maersk shares traded up 1.2 percent at 1053 GMT, outpacing a flat Copenhagen benchmark index .OMXC20CAP.
(Additional reporting by Ole Mikkelsen, Stine Jacobsen and Maiken Harris, Editing by Jane Merriman, John Stonestreet)
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