Thursday, March 4, 2010

A.P. Moller-Maersk Posts First Yearly Loss in Six Decades

In yet another sign of the endemic contraction of the shipping industry, the owner of the world’s largest container-shipping line reported this week its first annual loss in nearly 60 years.

A.P. Moller-Maersk, the Danish parent of global ocean carrier Maersk, also said that while it expects overall rates and cargo volumes to tick slightly positive this year it does not expects these increases to boost the firm past more than a "modest" profit in 2010.

The firm reported a net loss of $1.29 billion in 2009 on sales of $48.5 billion, compared to a $3.46 billion profit on $58.7 billion in sales posted in 2008.

A.P. Moller-Maersk, founded in 1904, told Bloomberg that the firm has not suffered an annual loss since World War II.

Container shipping, which accounts for about 40 percent of the firm's revenue, experienced it worst industry-wide downturn last year with massive cargo volume declines and rates falling dramatically across the board. Despite posting a container volume drop of only 1 percent in 2009 – as opposed to the industry-wide 13 percent – Maersk saw per container revenue fall 28 percent.

A severe downturn in the bulk freight market, particularly the market for oil tankers, has also been hard on A.P. Moller-Maersk – the world's largest fleet of oil tankers. The Maersk tanker business posted a $275 million profit on $5.52 billion in sales for 2009, compared to a $1.15 billion profit on nearly identical sales in 2008.

Beyond the container and tanker business, the firm's remaining core business of oil and gas production saw profits fall by more than 50 percent in 2009. The oil and gas division posted $1.16 billion in profits on $9.02 billion in sales for 2009, compared to $2.35 billion in profits on just under $12 billion in sales for 2008.