The world’s largest container carrier Maersk Line reported net loss of 66 million USD in Q1 2016, despite the improvement of the market conditions. The company’s net loss amounted to 80 million USD, compared to a profit of 32 million USD in the first quarter of last year. Meanwhile, the revenue of Maersk Line fell by 1 billion USD, amounting to 5.5 billion USD. The carrier explains the losses by a high dependence on the transportation market in the direction of north-south, where rates in the previous quarter remained below the level of the previous year, while the market average growth was caused by the growth of rates in the direction of East-West. Also, the results of Maersk Line were affected by the consequences of the Hanjin bankruptcy, as well as the higher bunkering costs.
“The liner division’s earnings were pulled down by bunker fuel prices that increased by 80% compared with the first three months of last year, but the carrier’s profit goal was still in play”, said the CEO of Maersk Group, Soren Skou. “Maersk Line is on track to deliver a result improvement of above 1 billion USD for 2017 compared to 2016, despite an underlying loss of $80 million USD in the first quarter, driven by a 381 million USD higher fuel bill”, added he.
Both spot freight rates and contract rates have increased during the quarter, lately also on the North-South trades. Maersk Line is focused on restoration of profitability and maintaining market share in the next quarters, as industry fundamentals improve.
Nevertheless, the main market indicators as a whole continued to improve in the first quarter, demand exceeded the nominal capacity for the second consecutive quarter. The volume of transport of Maersk Line for the past period increased by 10% against the level during the previous year. The growth was partly due to the increase in demand, as well as due to the increase in the market share of the carrier from the second half of 2016.
Maersk Line is the world’s largest overseas cargo carrier and operated over 600 vessels with 3.3 million TEU container capacity. As per September 2015, being still the largest container fleet, it holds 15.1% of the global TEU. Following the acquisition of Hamburg Sud, the company will expand to fleet of 743 vessels with a total capacity of 3.9 million TEU, as well as market share of 18.7%.