Maersk Line saw first quarter profit fall to $37m from $714m a year ago while ROIC of 0.7 per cent was down from 14.3 per cent, according to figures from the parent Maersk Group.
Revenue at $5.0bn was 20 per cent lower than in the first quarter of 2015 as a result of a 26 per cent decline in average freight rates to $1,857 per FFE ($2,493/FFE last year) – a result of lower bunker prices and deteriorating market conditions.
This was partially offset by a seven per cent increase in volumes to 2,361,000 FFE (2,207,000 FFE).
Container freight rates declined across all trades, especially Maersk Line’s key trades to and from Europe as well as Latin America and North America.
Maersk said it expects an underlying result significantly below last year ($1.3bn) as a consequence of the significantly lower freight rates going into 2016. Global demand for seaborne container transport is still expected to increase by 1-3 per cent. Maersk Line aims to grow at least with the market to defend its market leading position.
Damco, the supply chain division, made a profit of $2m (loss of $9m) and a ROIC of 3.0 per cent (-11.2 per cent). The result was mainly driven by cost saving initiatives and growth in supply chain management activities.
The Maersk Group as a whole delivered a profit of $224m ($1.6bn) negatively impacted by the low oil price and low average container freight rates.
Group CEO Nils S Andersen said: “While market conditions remain challenging, we continue to adjust our cost base to the new conditions and maintain a good operational performance across our businesses. We maintain our focus on strengthening the Group’s position in the market and have completed acquisitions within APM Terminals and Maersk Oil, and in Maersk Line we have defended our market leading position.”