Global Meltdown: AP Moller-Maersk Line Loses US$373 in Three Months

Global shipping giant, AP Moller-Maersk has confirmed that it recorded losses in its first quarter 2009 operations, attributing the loss to unfavourable and deteriorating general market conditions.
The AP Moller-Maersk Group is the parent company of APM Terminal, Apapa; the concessionaire of the container terminal in Apapa port, Lagos. The parent body raised alarm that its 2009 total balance sheet may be worse than 2008 performances.
  In an interim January to March, 2009 balance sheet which was released last week by the conglomerate, it lamented that it  registered a net loss of US$373 million in the first quarter compared with a net profit of $1,050 million in the same period of 2008.
Similarly cargo volume transported by Maersk Line fell 14 per cent and average freight rates were 24 per cent lower compared with the same period in 2008.
The statement says that the average oil price in the first quarter was 54 percent below average oil prices in the same period in 2008. The share of oil and gas production was 18 percent above the corresponding period of 2008.
Confirming the poor showing the group’s chief executive officer, Mr Nils S Andersen said that the “result is impacted by the extraordinary global recession, which affects all our markets negatively.”
“Our priorities for the Group remain unchanged. We will continue our efforts to strengthen Maersk Line’s competitiveness, building the strength of our people and organisation, reducing costs and improving our environmental record, which will strengthen the Group both in the short and in the long-term,” he said.
Looking ahead, the Group statement says the outlook for 2009 is subject to considerable uncertainty, especially due to the development in the global economy. Specific uncertainties relate to the development in container freight rates, transported volumes, the USD exchange rate and oil prices.
Compared to the first quarter the crude oil prices for the remainder of the year are assumed to be slightly higher, just as the diminishing decline in freight volumes in the container trades is expected to reduce the decline in the container freight rates.
These conditions combined with an increased effect from cost savings are expected to improve the Group’s earnings in the second half of 2009. A continued loss is expected for the second quarter and the company says it cannot be ruled out that the total result for 2009 could be negative.