Robust two-year forecast for Maersk.
Danish financial house Danske Market Equities is forecasting the parent company of ocean carrier Maersk Line will return to profitability in 2010 due largely to better container shipping freight rates. DME is forecasting all-in freight rates will increase 16 percent in 2010, and is projecting net profit of $172 million for the A.P. Moller - Maersk Group on the conservative side. The analyst's bull scenario sees Maersk earning more than $800 million during the year.
The report, released Jan. 28, said container shipping on the transpacific and Asia/Europe lanes has turned a corner, with demand growth to exceed supply growth over the first half of 2010. That will allow carriers to maintain an upper hand in spring rate negotiations on the transpacific, the analyst forecasts.
The report said Maersk Line's estimated revenue for 2010 will return to near-2007 levels, and that its operating revenue will hit $383 million, also close to its 2007 return of $487 million. The report predicts an even more robust 2011, with operating profit of $1.4 billion on virtually the same revenue levels as 2010. Volume growth is predicted to rise 4 percent this year and a further 7 percent in 2011.
DME said operating costs for Maersk will rise during the year, thanks solely to increased bunker cost. Other unit costs will actually fall 2 percent, but rising bunker costs will drive overall ship operations up 3.6 percent. Maersk, however, is likely to recover a portion of those bunker costs through surcharges assessed to shippers.