Copenhagen-based shipping conglomerate Maersk raised its earnings forecast for the year after announcing unexpectedly strong second-quarter profits today.
The world’s largest container-shipping company boasted a net profit of $439 million, which was up significantly from the $227 million it posted in the same period last year, a company statement said.
Lower fuel expenses helped raise profits as the company made a concerted effort to streamline its fuel consumption. According to news reports, Maersk spent nearly a third less on fuel in Q2 by reducing the speed of its ships – a process known in the industry as 'slow steaming'. This bump came despite container freight rates, as well as a cool down in the Europe-to-Asia trade route.
Last year, the Financial Times detailed how chief executive Nils Andersen was looking to invest in higher profit generators rather than focus on shipping, which is subject to volatile price adjustments. These prudent investments have helped Maersk rebound from a disastrous 2011, when the company recorded a net loss of $540 million.
“Maersk Line has made strong and consistent progress and is now an industry leader in terms of profitability,” Andersen said in a statement.
Despite the positive news, challenges still exist in a global shipping economy that continues to suffer. Last May, the Wall Street Journal reported that shipping companies worldwide have endured a decline in container traffic since 2007. This has prompted Maersk to look into other investment opportunities, and the company announced it would be establishing a fifth core business unit – tfocusing on tankers and freight forwarding – to go along with shipping, ports, oil and drilling. Andersen said this fifth unit hopes to achieve profits of $500 million by 2016.
A.P. Moller-Maersk shares soared nearly six percent on Friday morning on the strength of the figures.
