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Maersk Line Q1 profits up 57% at a record $714m

Maersk Line Q1 profits up 57% at a record $714m
Maersk Line continued to grow its profitability in the first quarter of 2015 reporting a 57% jump in profits.

The world’s largest container line reported a first quarter net profit of $714m compared to $454m in the same period a year earlier. Revenues for the first quarter were down slightly at $6.25bn compared to the $6.46bn in the corresponding period in 2014.

Maersk attributed the higher profitability mainly to lower bunker prices and appreciation of the US dollar. The average bunker price in the first quarter was $358 per tonne, compared to $581 per tonne a year earlier.

Despite higher profitability Maersk reported a fall in both volumes and average freight rates. The line volumes fell 1.6% to 2.2m teu compared to 2.24m teu in Q1 2014, while average revenue was $2,493 per feu in the first quarter, down from $2,628 per feu a year earlier.

“Especially affected were imports into Europe. The decline in EUR/USD has had a dampening effect on trade as buyers try to minimise the inflation impact from exchange rates. At the same time, carriers have added significant new capacity in the Asia­Europe trade which contributed to freight rates from Asia to Europe being historically low,” Maersk said.

The company repeated its line that it plans to “grow with the market” but also warned of tough times for the sector as a whole.

"Industry overcapacity and profitability remains a concern, however, with an estimated EBIT­ margin gap to the peer group of 9.3%­points in Q4 2014, Maersk Line is competitive and re­ mains above the ambition of sustaining a gap to peers above 5%­points,” it said.