Falling freight rates leave dent on Maersk profit margins
Weak oil prices and falling freight rates have knocked the net profit of A.P Moeller-Maersk A/S, with a significant drop within the second quarter, according to Market Watch.
The Danish company’s profit of $101million in the three months to end-June as well as a 16 percent fall in revenue to $8.86billion has fallen short of analysts’ expectations.
The result has been described as ‘unsatisfactory’ by Maersk Chief Executive Soren Skou, however cost reductions and operational optimisations have made a significant impact in mitigating the impact of ‘negative market conditions’.
Maersk Line costs are at an ‘all time low’ with a drop below $2,000 per forty-foot equivalent container unit.
The company said average container freight rates were 24% lower year-over-year in the quarter, while the oil price was down 26%.
Freight rates declined across all trades, by the most in North America and West Central Asia, but trade in Africa, rates in Oceania and Europe had also fallen.
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