Maersk downgrades forecasts
published: cw 27, 2006 in Logistics & ShippingA.P. M?ller ? M?rsk has issued a trading update, downgrading its earlier financial forecasts. The shipping group stated that a number of factors important to expectations for the total net result for 2006 had changed since the annual report 2005 was publicized in March 2006.
Maersk Line has not obtained the anticipated share of the general market growth during the first half year of 2006. Changes in the service network and the integration of the organisations following the acquisition of P&O Nedlloyd as well as the implementation of new IT systems have been contributing factors. It is the belief that Maersk Line?s service network is attractive to the customers, and an improvement of Maersk Line?s cargo volumes is expected in the second half year, even though the originally expected development for this period will not be met. At the same time, increased bunker costs and further reductions in the average freight rates have had a negative impact. The earnings for the container business before depreciations will consequently be considerably below the March expectations and unsatisfactory.
A net result for 2006 for the group in the order of 40% lower than the 2005-result, which was DKK 20.2 billion, is now expected. In March, the company reported ? before taking the above factors into account - a result that was 10-15% lower.
The estimate is still sensitive to changes in freight rates and volumes, especially in Maersk Line as well as changes in oil prices and currency rates.
Source: Maersk
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