Maersk reported revenue growth of 2.5% during Q1 despite continued red figures
DANISH shipping giant AP Moeller-Maersk group posted a first quarter loss of US$656 million from a year-on-year profit of $2.67 billion, drawn on this year’s revenue of $9.54 billion, up 2.5 per cent. « Operating earnings improved 33 per cent and cash flow from operations doubled to $1.5 billion, » said Maersk group CEO Soren Skou.
« With a strong free cash flow of $3.5 billion after the sale of the remaining shares in Total SA, we have significantly strengthened our balance sheet. The net interest-bearing debt is reduced by $2.4 billion since Q4 and by $7.1 billion since Q1 2018, » he said. Total operating costs were reduced 2.8 per cent impacted by lower container handling costs and network costs, excluding bunker. Unit costs at fixed bunker decreased 0.4 per cent to $1,882 per FEU negatively impacted by declining volumes.
Maersk concludes there is a global container demand slowdown
Global container trade grew 1.7 per cent year on year in the first quarter, showing a weaker momentum than in 2018 when full-year average trade growth was 3.6 per cent. The moderation of container demand growth reflects a slowdown in all the main economies, as well as the negative effects from fast-forwarding US imports in Q4 2018 when retailers prepared for a tariff hike, said the company statement.
« Looking ahead, global container trade is projected to increase by one to three per cent in 2019. The moderation of container demand growth mirrors the slowdown in global manufacturing and global export orders in recent quarters.
Alphaliner confirms volume growth down from 3.6% to 2.5%
« The main risks to global container demand relate to the US-China trade negotiations. The recent escalation of tariffs and threats of implementing additional tariffs could take container trade growth to the lower end of the one to three per cent, » said Maersk.
« The tariffs are the biggest negative risk that can seriously hit volumes and earnings, » Braemar ACM analyst Jonathan Roach told The Wall Street Journal. « The optimism we had just a few weeks ago when we thought a trade deal would be signed has evaporated. There is a lot of uncertainty out there, » said Mr Roach. Maritime data provider Alphaliner this week cut its container volume growth estimate for this year to 2.5 per cent from 3.6 per cent.
©2016HKSGGroupMedia