Maersk profits drop less than expected

Danish shipping and oil conglomerate A.P. Moeller-Maersk reported on Thursday a 2013 net profit fall, but better than analysts' forecasts, helped by improved profitability in the container transport business. Net profit for 2013 dropped by 11 percent to 19.38 billion kroner (2.59 billion euros, $3.54 billion). Overall sales were down by seven percent to 266.24 billion kroner. Net profit in the fourth quarter was down by eight percent to 5.13 billion kroner, exceeding the 4.5 billion kroner that analysts polled by Dow Jones Newswires had forecast. The group's quarterly revenue, however, fell by six percent to 65.67 billion kroner, far from the 74 billion kroner expected by analysts. The two main subsidiaries of the group, Maersk Line and Maersk Oil, saw their revenue drop by 6.0 and 13.0 percent respectively, but operational profit in the container transport business, where Maersk Line is the world's bigger operator, increased thanks to a rationalisation of the offer. "Profit in 2013 was positively affected by improved volumes and unit cost reductions in Maersk Line," the group said in a statement. "Profit was negatively affected by lower freight rates in Maersk Line, a decline in Maersk Oil's share of production, a decline in the average oil price." For 2014, A.P. Moeller-Maersk expects "a result significantly above" 2013, thanks to the sale of its supermarket business (Dansk Supermarked), which it announced in January. Without this exceptional operation, "the underlying result is expected to be in line with the result of 2013". Maersk Line aims to grow with the market, which is expected to increase by four to five percent, but the company warns that "excess capacity is likely to depress freight rates". Maersk shares were 2.14 percent down in late morning trading on the Copenhagen Stock Exchange, where the main index was down by 0.37 percent.