A.P.Møller-Mærsk Delivers Record Profit

2010 was a turnaround year for A.P.Møller-Mærsk. For the first time, Denmark’s largest company now announces its expectations for 2011 which are a lower profit than the year before.

In 2010 the Mærsk group achieved a historic profit of USD 5 billion corresponding to DKK 28.2 billion and a profit before tax of DKK 54.4 billion on revenue of DKK 315 billion. The result was completely in line with the group’s own expectations.

CEO Nils Smedegaard Andersen and the Mærsk managers do not expect a result like this in 2011.

»The A.P.Møller-Maersk Group expects a result lower than the 2010 result. Cash flow from operating activities is expected to develop in line with the result while cash flow used for capital expenditure is expected to be significantly higher than in 2010,« the group wrote in its annual report.

The group profit in 2010 was particularly positively affected by the development in Maersk Line which accounts for about half the group revenue.

»The group’s result was positively affected by recovery in world trade and continued improvement of competitiveness through further cost savings and alignment of activities,« the company wrote.

The average freight rate of the container activities increased by 29 per cent in 2010 after a decline of 28 per cent i 2009.

Two days after the presentation of an order for the world’s 10 largest container vessels – and an option for a further 20 – the shipping company can now report a profit of DKK 14.9 billion compared to an operating loss of DKK 10.5 billion in 2009.

For 2011 Maersk Line expects a profit – without giving any further details.

The reason why the 2011 result will not be higher than the 2010 result is the significant stockpiling in 2010.
After the the year of crisis, 2009, businesses all over the world needed to fill their stocks, a development which was for the benefit of Maersk Line. Now the stock levels are generally back to normal and this slightly reduces earnings.
While the freight rates were increasing in the container market in the first part of 2010, the rates were falling in the the fourth quarter. This trend has continued into the new financial year. And this also applies to the trend for higher fuel prices.
A.P.Møller-Mærsk employs 115,000 people in 130 countries.


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