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Maersk Line profit up 50% to $2.3bn in 2014

Maersk Line profit up 50% to $2.3bn in 2014
Maersk Line has reported a profit of $2.3bn for 2014 a 50% increase over the previous year, and expects a higher result in 2015.

The Danish container shipping giant said that underlying profit for 2014 was $2.2bn compared to $1.5bn in 2013. "Maersk Line improved its position and the start up of the 2M alliance has gone well," said Maersk Group ceo Nils Andersen.

The surge in profits came despite average freight rates decreasing by 1.6% to $2,630 per feu.

“The achievement came from 5.4% lower unit costs mainly due to improved network efficiencies and lower bunker price. Efficiencies were achieved through increased volumes in line with market as well as continued vessel network optimisation and active capacity management,” Maersk said in its annual report.

Bunker consumption based on kg per feu was reduced by 7.9% and prices decreased by 5.7%.

The company estimated an EBIT margin gap of 9% to its peers, which it said was significantly higher than the 5% targeted.

Fleet capacity increased to 2.9m teu at the end of 2014 compared to 2.6m teu at the start mainly due to the delivery of 11 triple E vessels with 18,000 teu in capacity. Five more Triple-E vessels to be deployed on the Asia – Europe trade are to be delivered in the first half of 2015.

“To minimise the impact of the low and volatile freight rate environment, Maersk Line continued to absorb capacity by active capacity management in the form of idling, slow steaming and blanked sailings,” the company said.

Looking ahead Maersk Line is expecting to better its 2014 underlying result of $2.2bn in 2015.

“Maersk Line aims to improve its competitiveness through unit cost reductions and implementation of the new 2M alliance,” it said.

With global container shipping volumes forecast to grow at 3% - 5% in 2015 Maersk Line is aiming to grow in line with the market.