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Maersk eyes modest profit after first loss

City A.M. Reporter
DANISH shipping and oil group AP Moller-Maersk said yesterday it would return to a “modest” profit in 2010 after weak global trade knocked freight rates and dragged it deep into the red for 2009 – its first-ever annual loss.

The group’s Maersk Line is the world’s biggest container shipping company and is sometimes seen as a barometer of world trade, which remains depressed in early 2010.

Analysts said the new guidance was disappointing, and Maersk shares initially slid as much as 6.7 per cent before trimming losses to close 3.9 per cent lower at DKK42.09, lagging a 0.8 per cent fall in the Copenhagen bluechip index.

Chief executive Nils Smedegaard Andersen said the container shipping business would remain in the red this year though other Maersk operations – from oil and gas to offshore services, port terminals and supermarkets – would continue to perform well.

“We are not guaranteeing that we will be back in the black in 2010, but at the moment it is our strong ambition and expectation to deliver a profit this year,” he said. “Priority number one is to return to profit,” he said after AP Moller-Maersk reported a 2009 net loss of 5.49bn Danish crowns in 2009 against a profit of 17.53bn in 2008. “The main factors driving [2009 results] down of course were low rates in containers and in tankers as well as a significant drop in the oil price -- these were really the negatives of last year,” Andersen said.

“We do not expect the container line to be back in profits in 2010. Rates have improved but they are still not at a level where they can give acceptable profitability. To have a healthy upswing we need not just positive figures from Asia but also the consumer in US and Europe to pick up more goods, at the moment,” Andersen said.