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Terminals, tugs and tankers add to Maersk’s Q1 good fortune

Terminals, tugs and tankers add to Maersk’s Q1 good fortune
Maersk Group has reported a 53% boost in profits to $1.2bn for the first quarter, as revenues that rose 1% to $11.7bn.

Maersk Line saw profits improve as costs continued to be cut, leading to an improvement in its 2014 outlook.

APM Terminals made a $215m profit in Q1, up from $166m, as expansion helped increase container volumes by 9% to 9.4m teu, with 2% of that expansion down to new terminals. APM Terminals also offloaded a 29% stake in its Callao, Peru operation and China Shipping bought a 24% share in APM Terminals Zeebrugge in Belgium.

The group's terminal arm is expected to outperform 2013's full year profit of $770m on the back of new terminals and improved productivity.

Maersk Oil's results were consistent with last year at a $346m profit as lower oil prices balanced a 7% increase in entitlement production. Maersk Drilling saw an expected drop in profit to $116m as three rigs underwent planned yard stays for upgrades and start up costs were booked for new rigs joining the company's fleet.

Revenues were down from $1.5bn to $1.4bn at the group's services and other shipping segment, which includes Maersk Tankers, Maersk Supply Service, Svitzer and Damco, with an increase in profit to $75m from $67m.

Maersk Supply Service came in below expectations as its Q1 profit fell from $45m to $24m on a tough market, with low utilisation widening the gap left by a $7m sales gain in Q1 2013.

The Danish group's tanker arm had a busy quarter, agreeing to sell its fleet of 15 VLCCs to Euronav for $980m, while managing to reverse last year's Q1 loss of $15m by recording a $28m profit. The improved fortunes were attributed to improved rates across all sectors, including a 92% rise in VLCC rates, and a 17% drop in administrative expenses.

Logistics arm Damco's loss came in at $10m as expected, due to its restructuring. While marine company Svitzer increased profit 10% to $33m with strong salvage activity and positive developments in towage in the Americas.

The Maersk Group is expecting a 2014 results "significantly above" that of 2013, swollen by a $2.8bn gain on the sale of Dansk Supermarket Group, with an increased results of $4bn excluding discontinued operations, impairment losses and