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Maersk reports profit rise, tough container market

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(Globalpost/GlobalPost)

Danish conglomerate A.P. Moeller-Maersk reported on Friday an annual profit above expectations thanks to an Algerian tax settlement, and said profit from its container ships business would rise this year.

Net profit in 2012 grew 29 percent to 23.395 billion kroner ($4.038 billion, 3.136 billion euros) on sales which rose 6.0 percent to 342.06 billion kroner.

"Profit was positively affected by the settlement of an Algerian tax dispute in the first quarter of $899 million (681 million euros) combined with improved volumes, rates and unit costs for Maersk Line," the company said in a statement.

The Copenhagen-based company reported a 5.54-billion-kroner net profit in the fourth quarter, a leap from 1.62 billion kroner in the same period in 2011, and above a 4.51 billion kroner consensus by analysts polled by Dow Jones Newswires.

The one-off tax gain at Maersk Oil offset a 23-percent decline in production, owing mainly to a lower share of production in Qatar and Denmark.

Maersk Line, the subsidiary operating container ships, had to reduce capacity on its Asia-Europe routes last year amid a slump in global trade.

The unit, which accounts for around half of Maersk's revenue, swung to a profit after it raised freight rates and reduced its headcount.

"Maersk Line expects a result above 2012 based primarily on further unit cost reductions," the company said.

The Danish index heavyweight said that growth in the global container market was expected to remain modest this year, rising by 4-5 percent, and that the outlook for the Asia-Europe line was "bleak."

"The container shipping market is most likely expected to see a continued downward pressure on freight rates in 2013," it said.

Maersk said it believed the group's profit would be lower this year than in 2012, but that it would be in line with last year on an operational level if impairment losses, divestment gains and the Algerian tax gain were excluded.

Shares in the company were showing a gain of 0.37 percent in morning trading on the Copenhagen stock market, which was up by 0.61 percent.

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http://www.globalpost.com/dispatch/news/afp/130222/maersk-reports-profit-rise-tough-container-market