The pressure on the big container business, Maersk Line, now compels the CEO of Denmark’s largest business group to adjust the expectations downwards.
The container market is under such a strong pressure that Maersk Line operated with a loss far bigger than expected in the third quarter. Consequently, CEO Nils Smedegaard Andersen now downgrades the result 2011 for the container business.
“The Groups’s container activities now expect a negative result for the full year as a consequence of lower rates on especially the Asia-Europe trade,” the company wrote in its third-quarter report.
The previous expectation was “a modest positive result” in Maersk Line.
In spite of the headwinds for the container business the CEO maintains his expectations for the group’s combined result. This means that the 2011 expectations remain to be “a result lower than last year”.
In 2010 A.P.Møller-Mærsk achieved a record profit of USD 5 billion (or DKK 28.2 billion) after taxes.
This year the group expects a 2011 result in the region of USD 3.1-3.5 billion (approx. DKK 18.8 billion) including the gain from the divestment of Netto Foodstores, UK.
“The outlook for 2011 is subject to uncertainty, not least due to developments in the global economy, oil price and global trade conditions,” the APM management wrote.
The group’s profit before tax amounted to DKK 9.5 billion against the expected DKK 10.2 billion, and revenue amounted to DKK 80.8 billion against the expected DKK 78.5 billion.
In the third quarter 2010 the profit before tax was DKK 15.8 billion and revenue DKK 81.2 billion.
The result for Maersk Line was a loss before tax of DKK 1.3 billion. In the corresponding period last year the result was a profit before tax of DKK 6.4 billion.
For the third quarter the analysts had expected a loss for Maersk Line of DKK 1.1 billion. For the full year the analysts expect a loss in Maersk Line of DKK 943 million and for 2012 they expect a loss of DKK 641 million.
The A.P.Møller-Mærsk management does not specify its expectations for Maersk Line for 2011 and 2012.