Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

World's biggest container shipper lifts earnings outlook, a good omen for global trade

COPENHAGEN - The world's largest shipping company says it is sending more containers around world, a sign that global trade — and possibly economic growth — is picking up.

A.P. Moller-Maersk, which investors monitor as a bellwether for world trade, lifted Tuesday its earnings outlook on the back of an increase in freight volumes, a promising development at a time when a major economy like China is slowing and much of Europe remains stagnant.

The Danish group said shipping volumes rose 6.6 per cent in the second quarter, one of several factors that caused its net profit to more than triple to $2.3 billion.

CEO Nils S. Andersen noted the profits were "achieved in challenging markets" and helped by cost cuts and a profit on the sale of a majority stake in the company's retail business.

But the figures are likely to support expectations of a pickup in trade this year from a weak level in 2013. The World Trade Organization in April forecast trade will grow by 4.7 per cent, more than double last year's 2.1 per cent but still short of the 20-year average of 5.3 per cent.

Maersk did not specify in what regions its activity is growing, but the WTO sees trade increasing in the United States, some parts of Europe and many developing countries.

The Copenhagen-based group, which also has operations in the oil and drilling industry, said its overall revenues rose to $12 billion in the three-month period that ended June 30 from $11 billion a year earlier.

As a result, it now expects its profit for 2014 to be "significantly above" the 2013 result of $3.8 billion. When not counting one-time gains or charges, it expects profit to be $4.5 billion, up from expectations of $4 billion.

Despite the improvements, Maersk said it had to keep focusing on cutting costs. The company this year sought to create an alliance of the world's three biggest container shipping operators. The deal to set up an independently operated network of 255 vessels in late 2014 was scrapped, however, due to opposition by Chinese authorities.

Instead of that deal, Maerks's shipping division in July entered a 10-year vessel-sharing agreement with the world's second largest carrier, Mediterranean Shipping Company, on key routes across the Atlantic, Pacific and between Europe and Asia.

The company on Tuesday also announced it would launch a structured share buy-back program of up to 5.6 billion kroner ($1 billion) to be carried out over a 12-month period. Shares in Maersk jumped 5 per cent in Copenhagen to 14,180 kroner.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Election 2014
Brandon Sun Business Directory
The First World War at 100
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates