Danish shipping and offshore energy conglomerate Maersk Group reported its profit at USD 253 million for the first quarter of 2017, compared to USD 224 million seen a year earlier, in line with expectations.

The group’s revenue increased by 5 percent to USD 8.9 billion from USD 8.5 billion reported in the first quarter of 2016, as a result of revenue growth in the group’s businesses Maersk Line and Maersk Oil. Namely, Maersk Oil saw a surge of 33 percent, or USD 343 million, in its revenues, while Maersk Line experienced a rise of 10% in revenues, or USD 519 million.

The underlying profit of USD 201 million, compared to USD 214 million reported a year earlier, was at the same level as last year, reflecting an increase of USD 321 million in Maersk Oil due to higher oil price and lower operating expenses, offset by decreases in almost all other businesses.

“We delivered year-on-year revenue growth for the first time since Q3 2014 in line with our ambitions to become a growth company again,” Soren Skou, CEO, A.P. Møller – Mærsk A/S, said.

The group’s container shipping business Maersk Line reported a negative ROIC of 1.3% and a loss of USD 66 million for the first quarter of the year, against a profit of USD 37 million seen in the same period in 2016. Market fundamentals continued to improve in the three-month period ended March 31 and demand outgrew nominal supply for the second consecutive quarter, according to the company.

“Maersk Line is on track to deliver a result improvement of above USD 1 billion for 2017 compared to 2016, despite an underlying loss of USD 80 million in Q1, driven by a USD 381 million higher fuel bill,” Skou added.

The company informed that both spot freight rates and contract rates have increased during the quarter, lately also on the North-South trades.

Additionally, APM Terminals reported a decrease in its profit which reached USD 91 million, compared to USD 108 million seen a year earlier, and a ROIC of 4.5%. The underlying profit was negatively impacted by declining markets in West Africa and rate pressure in a number of locations due to overcapacity. In line with the new strategy no new terminal projects have been pursued and APM Terminals achieved a positive free cash flow of USD 88 million.

“We are starting to see synergies in Transport & Logistics, for example with Maersk Line increasing volumes to APM Terminals, improved collaboration between Maersk Line and Maersk Container Industry leading to significantly higher volumes and improved results, as well as cost synergies on Sales, General & Administration,” Skou said.

During the quarter, the sales and purchase agreement to acquire the German container shipping line Hamburg Süd from the Oetker Group was approved by the boards of the Oetker Group and Maersk Line. The company will acquire Hamburg Süd for EUR 3.7 billion on a cash and debt-free basis. A syndicated loan facility has been established to fully finance the acquisition.

“The Hamburg Süd acquisition is progressing as planned towards a closing in fourth quarter, subject to regulatory approvals. The acquisition will deliver substantial revenue, volume and market share growth as well as operational synergies of USD 350-400 million per year from 2019,” Skou said.


ZIM Shrinks Net Loss

Israel’s shipping company Zim Integrated Shipping Services (ZIM) managed to cut its net loss during the first quarter of 2017 to USD 6.4 million, compared to a net loss of USD 56.3 million reported in the corresponding period a year earlier.

The company’s total revenues increased by 4% to USD 655 million, compared to USD 630 million in the same three-month period in 2016, while its operating cash flow stood at USD 33.8 million, against a negative USD 14.6 million seen a year earlier.

Additionally, ZIM said that it saw a 3.6% increase in its carried volumes which reached 598 thousand TEUs, compared to 577 thousand TEUs handled in the first quarter of 2016, while the average freight rate per TEU stood at USD 953, against USD 943 in the same period in the previous year.

The shipping liner industry has been going through major developments and changes in the last year, with the increased mergers and acquisitions and the changes in the alliances’ structure. Since the third quarter of 2016 ZIM said that it has been witnessing a positive trend in the industry with slightly improved freight rates in some trades. However, market conditions on the whole “remained challenging and volatile.”

“In the face of this tough business environment, ZIM continues to outperform the industry and achieve improved results. ZIM’s Q1 results reflect the constant improvement in the company’s performance, as a result of the comprehensive transformation the company has implemented in recent years,” according to the company.



Shanghai-listed COSCO Shipping Holdings Co, a unit of China Cosco Shipping Corporation Limited (Cosco Shipping), has returned to profit in the first quarter of 2017, driven by a recovery in the container shipping market.

The company posted a net profit of CNY 270 million (USD 39.1 million) for the quarter, against a net loss of CNY 4.46 billion reported in the corresponding three-month period of 2016, mainly due to a first quarter investment income of CNY 274 million compared to an investment loss of CNY 2.11 billion for the previous year’s quarter.

The shipping firm’s revenues for the first three months surged by 48 percent to CNY 20.1 billion from CNY 13.5 billion seen a year earlier, while its operating profit reached CNY 425 million, bouncing back from an operating loss of CNY 4 billion.

COSCO Shipping Holdings carried 4.65 million TEUs during the quarter, representing a jump of almost 54 percent compared to 3 million TEUs handled in the same period in 2016, while its revenue from shipping routes surged by 70 percent to CNY 17.1 billion from CNY 10 billion in the respective periods.

The company’s terminal business saw a 7.5 percent increase in volumes, reaching a total throughput of 29.9 million TEUs in the first quarter of 2017.

World Maritime News Staff