Maersk Line: Big loss and lower revenue in 2016

Maersk Line made a loss of USD 376 million (profit of USD 1.3billion in 2015) and a ROIC of negative 1.9% (positive 6.5%) in 2016. Revenue of USD 20.7 billion was 13% lower than in 2015 (USD 23.7bn).

The development in revenue was driven by an 18.7% decline in average freight rates to 1,795 USD/FFE (2,209 USD/FFE) and only partially offset by a 9.4% increase in volumes to 10.41 million FFE (9.52 million FFE). Volumes increased across all trades, with the biggest contributors being East-West backhaul and North-South headhaul. The lower freight rates were attributable to oversupply in the market as well as modest market demand especially in Africa and Latin America.

Maersk Line’s freight rates declined significantly across all trades. On East-West, the North American trade declined the most due to increased competition as well as increase in backhaul cargo at lower freight rates. On North-South, the West Central Asia trade declined the most, impacted by imbalance from oversupply built up over 2015 and 2016.

Meanwhile, container demand on the North-South trades was notably suppressed in 2016, mainly due to declining imports in Africa and South America. Recognised freight revenue was USD 18.6 billion (USD 21.3 billion) and other revenue was USD 2.1 billion (USD 2.4 billion).

The intended acquisition of Hamburg Süd, will enable Maersk Line to offer an improved value proposition on its North-South trades and in the reefer segment. It is subject to final agreement expected early in Q2 2017 and to regulatory approvals expected end 2017. The transaction is expected to be completed by end 2017.

Maersk Line in 2016, 2015, 2014, 2013 and 2012

Transported volumes (FFE in ’000)10,4159,5229,4428,8398,493
Average freight rate (USD per FFE)1,7952,2092,6302,6742,881
Unit cost (USD per FFE incl. VSA income)1,9822,2882,5842,7313,054
Average fuel price (USD per tonne)223315562595661
Maersk Line fleet, owned292285274275270
Maersk Line fleet, chartered347305336299326
Fleet capacity(TEU in ’000)3,2392,9622,9462,6312,625

 

Transported volumes

FFE (’000) 20162015ChangeChange %
East-West3,6913,31537611.4
North-South5,1034,7403637.6
Intra-regional1,6211,46715410.5
Total10,4159,5228939.4

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