* Q1 net profit $790 mln vs forecast $726 mln
* Reiterates sees 2013 profit below 2012
* Maersk Line still sees stronger 2013 result vs 2012
* Shares rise 0.7 pct in negative wider market
(Recasts with move to raise prices in July)
By Mette Fraende
COPENHAGEN, May 17 A.P. Moller-Maersk
, owner of the world's biggest container shipping
company, is "100 percent certain" it can more than double
freight rates in July despite market weakness that has seen
prices fall by a third since March.
Shipping has taken a hammering in the past five years, hit
both by the broad weakness of the global economy and a boom in
orders for huge new freighters put in by major players just as
the 2008 financial crisis hit.
The Danish group, whose Maersk Line vessels make up around
15 percent of world container shipping capacity, however, said
its container shipping unit swung back to a $204 million profit
in the quarter from a $599 million loss a year earlier, beating
While those results benefitted from briefly improved prices,
Maersk and other major players are now desperate to raise the
industry's traditionally volatile rates, after a fall in the
past two months that left most trading at a loss.
Chief Executive Nils Smedegaard Andersen said he had "no
doubt" Maersk Line would be successful in its plans to hike
rates to $1481 per twenty foot container from July 1 from $731
Those spot rates, however, are traditionally only a basis
for negotiation with clients and he also admitted that the
outlook for the industry was bleak. The company cut its forecast
for a rise in demand in 2013 to 2-4 percent from 4-5 percent
"To be honest, we just have to get used to the fact that
these are harder times, and that there will be harder times
ahead," Andersen said at a teleconference.
Market capacity is also expected to increase significantly
later this year, not least when the first of Maersk's 20 new
mega vessels is delivered by Korea's Daewoo Shipbuilding &
The slump of around 400 dollars in spot rates - a 36 percent
fall - since March had fuelled speculation that Maersk, which
traditionally offers a conservative financial outlook, could be
cutting 2013 expectations.
"The fact that they keep their outlook unchanged at a time
when Asia to Europe freight rates are at an absolute low, is an
important signal (for the full year results)," said Sydbank
analyst Jacob Pedersen.
The group's first quarter net profit fell to $790 million,
down about 30 percent from the same period a year earlier which
included $899 million in settlement for an Algerian tax dispute.
The result was above an average forecast of $726 million in
a Reuters poll of analysts.
The company reiterated its overall group outlook for the
this year's net profit to be below last year's $4.0 billion, and
the result for its container shipping unit, Maersk Line, to
exceed last year's $461 million.
The improvement at Maersk Line countered a 73 percent drop
in net profit at Maersk Oil to $346 million, hit by a falling
oil price and lower production but ahead of forecasts.
The group's shares rose 0.7 percent on Friday versus a 0.4
percent fall in the Copenhagen stock exchange.
(Additional reporting by Shida Chayesteh, Stine Jacobsen and
Ole Mikkelsen; Editing by Patrick Graham)