Maersk Line reports USD 1.3 billion profit in 2015
Maersk Line’s 2015 result was USD 1.3 billion which is 44% lower than 2014 (USD 2.3bn) due to weak demand and very low freight rates, the company said in its press release. Revenue was USD 23.7 billion which is 13.2% lower than in 2014 (USD 27.4bn).
2015 was characterised by deteriorating market conditions with declining rates and close to zero volume growth. Maersk Line’s average rate decreased by 16% compared to 2014. In the fourth quarter (Q4), the decrease was 25% compared to Q4 2014. Rates declined due to weak demand, over-capacity and intense price competition. Rates declined across all trades except North America. In the Asia – Europe trade, rates reached an all-time low.
Global container shipping demand growth was 0-1% and the global container fleet (capacity) growth was 8%. The low demand growth was due to weaker imports into Europe and slowdown in emerging market economies. The Europe, West Africa and South America (East Coast) markets had negative growth.
The unit cost decreased by 11.5% to a record low of 2,288 USD/FFE. The EBIT-margin gap to peers is at 6.6%-points (est.), in line with the +5%-points target.
The implementation of the 2M vessel sharing agreement (VSA) with MSC entailed an unprecedented phase-in of 193 vessels and 2M is delivering benefits in line with the target.
In November 2015, Maersk Line announced the acceleration of its organisational transformation driven by standardisation, automation, and digitisation of processes. This includes reducing the global organisation by at least 4,000 positions by the end of 2017. This will result in a leaner, more agile and more focused organisation.
In August 2015, Maersk Line announced a revised growth strategy: To grow at least in line with the market to defend its market leading position. In support hereof, Maersk Line ordered 27 new container vessels and 130,000 containers. The container vessels will be delivered 2017 and onwards.
Maersk Line expects the container shipping market to remain weak and rates under pressure due to over-capacity. Maersk Line expects the global container shipping demand to grow by 1-3% in 2016.
Maersk Line expects a significantly lower underlying result for 2016 compared to 2015 (USD 1.3bn).
About Maersk Line
Maersk Line is the world’s largest container shipping company, known for reliable, flexible and eco-efficient services. Maersk Line provides ocean transportation in all parts of the world. Maersk Line serve its customers through 324 offices in 115 countries. Maersk Line employ 7,600 seafarers and 23,200 land-based employees and operate 590 container vessels. Maersk Line market its services through the Maersk Line, Safmarine and SeaLand (Intra-Americas) brands. Maersk Line is the holding company for MCC Transport (Intra-Asia) and Seago Line (Intra-Europe).
Maersk Line is part of the Maersk Group, headquartered in Copenhagen, Denmark. The Group employs over 88,000 people in some 130 countries. 2015 revenue: USD 40.3 billion.
