COPENHAGEN: Maersk Line reported a Q1 2015 result that is USD 260 million higher than Q1 2014. Revenue in Q1 2015 was USD 6,254 million, which is 3.2% lower than Q1 2014 (USD 6,463 million)

 

“I am very satisfied with our reported Q1 result. It is the best Q1 result ever. Our return on invested capital is also very satisfactory and well above our targets. However, we are not satisfied with the fact that our volumes dropped and our unit costs increased. We will regain lost ground and do more to adjust capacity to demand,” says Søren Skou, CEO of Maersk Line.

 

Maersk Line achieved this by lower bunker costs and a strong US Dollar. In the same time, volumes decreased by 1.6% to 2.207 million FFE and unit costs increased by 2.1%.

 

The higher unit cost is the result of a lower vessel utilisation.

 

The return on invested capital was 14.3%. Maersk Line’s medium and long-term target for return on invested capital is 8.5% and 10% respectively.

 

Rates decreased by 5.1% to USD 2,493 (USD 2,628 in Q1 2014) partly due to lower fuel costs. Furthermore, the supply/demand gap increased as global supply (nominal capacity) grew by 7.2% and demand 1.6%. This put rates under additional pressure.

 

Maersk Line will take out capacity in the Asia – Mediterranean and West Africa trades. In these trades, our capacity has grown more than demand. We will also consider further blanking of services in order to improve our vessel utilisation and save cost.

 

Maersk Line’s strategy has been and remains to grow with the market. To ensure that we can continue to grow in line with demand growth, we need more vessels by 2017. In March, we announced the first order: Seven 3,600 TEU (twenty-foot equivalent) container vessels.

 

The implementation of Maersk Line’s new East-West network, which is based on the 2M vessel sharing agreement with MSC, has been successfully concluded. The network offers our customers more services, faster transit times and improved port coverage. The implementation involved the redeployment of almost 200 vessels.

 

“The first quarter of 2015 illustrates very well that our industry is more competitive than ever with an increasing supply/demand gap.

 

This quarter we were helped by the oil price and exchange rate. But we cannot always rely on external factors to achieve good results. We must therefore remain focused on doing even more on our cost leadership and continue to improve and deliver the products our customers demand,” concludes Søren Skou.

 

(USD million)                          Q1/2015           FY 2014

 

Revenue                                  6,254                27,351

 

Reported profit                        714                    2,341

 

Volume (FFE ‘000)                  2,207                 9,442

 

Rate (USD/FFE)                     2,493                 2,341