Shipping giant Moller-Maersk triples profits on higher freight volumes
The Copenhagen-based group said it expects results for 2014 to be "significantly above" the 2013 results of $3.8 billion
COPENHAGEN, Denmark—A.P. Moller-Maersk, a shipping giant that investors monitor as a bellwether for world trade, lifted its full-year earnings outlook after reporting that its second-quarter profits nearly tripled.
The Danish group said earnings were boosted by higher freight volumes, a positive sign for global growth even as China’s economic activity is slowing and Europe’s is stagnant.
CEO Nils S. Andersen noted the results were “achieved in challenging markets” and helped by cost cuts and a profit on the sale of a majority stake in the company’s retail business.
Net profit jumped to $2.3 billion in the three-month period that ended June 30, from $856 million in the year-earlier period. Revenues rose to $12 billion from $11 billion a year earlier.
The Copenhagen-based group said it expects results for 2014 to be “significantly above” the 2013 results of $3.8 billion. When not counting one-time gains or charges, it expects profit to be $4.5 billion, up from expectations of $4 billion.
Amid the improving results, the company decided to launch a structured share buy-back program of up to 5.6 billion kroner ($1 billion) to be carried out over a 12-month period.
In June, China blocked a plan to create an alliance of the world’s three biggest container shipping operators: Møller-Mærsk, France’s CMA CGM SA and Switzerland-based Mediterranean Shipping Co. U.S. and European authorities had given the green light to the new network with 255 vessels to start in late 2014.