Maersk Line reported a USD 714 million profit in Q1 2015. It is the best first quarter ever in Maersk Line.
- USD 714 million profit – a 57.1% improvement compared to Q1 2014 (USD 454m)
- 14.3% return on invested capital (9.0%)
- Strong results were driven by lower fuel costs and a stronger US dollar
- Volumes decreased by 1.6%, average rate decreased by 5.1%
- Unit cost (at fixed bunker price USD 400/T) increased by 2.1%
- Global container demand grew with 1.6% while supply increased with 7.2% (year-over-year)
- The previous guidance on the full year result is maintained. The 2015 result is expected to be above the 2014 result
Maersk Line reported a Q1 2015 result that is USD 260 million higher than Q1 2014. Revenue in Q1 2015 was USD 6,254 million, which is 3.2% lower than Q1 2014 (USD 6,463 million)
We achieved this by lower bunker costs and a strong US Dollar. In the same time, volumes decreased by 1.6% to 2.207 million FFE and unit costs increased by 2.1%. The higher unit cost is the result of a lower vessel utilisation.
The return on invested capital was 14.3%. Maersk Line’s medium and long-term target for return on invested capital is 8.5% and 10% respectively.
“I am very satisfied with our reported Q1 result. It is the best Q1 result ever. Our return on invested capital is also very satisfactory and well above our targets. However, we are not satisfied with the fact that our volumes dropped and our unit costs increased. We will regain lost ground and do more to adjust capacity to demand,” says Søren Skou, CEO of Maersk Line.
Rates decreased by 5.1% to USD 2,493 (USD 2,628 in Q1 2014) partly due to lower fuel costs. Furthermore, the supply/demand gap increased as global supply (nominal capacity) grew by 7.2% and demand 1.6%. This put rates under additional pressure. Maersk Line lost volume as we limited how low rates we could accept for our products.
Maersk Line will take out capacity in the Asia – Mediterranean and West Africa trades. In these trades, our capacity has grown more than demand. We will also consider further blanking of services in order to improve our vessel utilisation and save cost.
Maersk Line’s strategy has been and remains to grow with the market. To ensure that we can continue to grow in line with demand growth, we need more vessels by 2017. In March, we announced the first order: Seven (7) 3,600 TEU (twenty-foot equivalent) container vessels.
The implementation of Maersk Line’s new East-West network, which is based on the 2M vessel sharing agreement with MSC, has been successfully concluded. The network offers our customers more services, faster transit times and improved port coverage. The implementation involved the redeployment of almost 200 vessels.
“The first quarter of 2015 illustrates very well that our industry is more competitive than ever with an increasing supply/demand gap. This quarter we were helped by the oil price and exchange rate. But we cannot always rely on external factors to achieve good results. We must therefore remain focused on doing even more on our cost leadership and continue to improve and deliver the products our customers demand,” concludes Søren Skou.
Maersk Group Interim report 1st Quarter 2015: http://investor.maersk.com/financials.cfm
Contact: Senior Press Officer, Michael Christian Storgaard,
+45 3363 3534 or michael.storgaard@maersk.com
About Maersk Line
Maersk Line is the world’s largest container shipping company, known for reliable, flexible and eco-efficient services. We provide ocean transportation in all parts of the world. We serve our customers through 374 offices in 116 countries.
We employ 7,100 seafarers and 25,500 land-based employees and operate 608 container vessels. We market our services through the Maersk Line, Safmarine and SeaLand (Intra-Americas) brands. Maersk Line is the holding company for MCC Transport (Intra-Asia), Seago Line (Intra-Europe) and Mercosul (Brazil).
Maersk Line is part of the Maersk Group, headquartered in Copenhagen, Denmark. The Group employs about 89,207 people in around 130 countries. 2014 revenue: USD 48 billion.
Key Financial Figures
(USD million)Q1/2015FY 2014Revenue6,25427,351Reported profit7142,341Volume (FFE ‘000)2,2079,442Rate (USD/FFE)2,4932,341ROIC (%)14.30%11.60%FFE: Forty-Foot Equivalent Unit
Source: Maersk Line press release
Source: Maersk Line press release