AMKBY AP Moller Maersk AS (PK)

   By Dominic Chopping 
 

A.P. Moeller-Maersk A/S (MAERSK-B.KO) reported net profit above estimates in the third quarter after benefiting from higher freight rates and synergies, but a sharp rise in fuel prices weighed and volumes were lower than hoped.

The shipping firm posted a third-quarter net profit of $347 million, from a $1.56 billion loss in the same period last year, sailing above an average analyst forecast from FactSet of $298 million. Revenue rose 31% to $10.08 billion against expectations for $9.92 billion.

Maersk, which moves about 18% of all containers world-wide and is considered a barometer of global trade, narrowed its guidance for core profit this year to between $3.6 billion and $4 billion, from a previous estimate of $3.5 billion to $4.2 billion. It still expects a positive underlying profit.

The organic volume growth in its main ocean unit is now expected to be in line with an increased estimated average market growth of 3%-4% for 2018, having previously seen slightly below-estimated average market growth of 2%-4%.

Average freight rates increased by 5.5% in the quarter, while the average bunker price increased by 47% compared with last year, it said. Global volumes increased compared with last year; however, the demand was weaker than expected, which led to volumes being lower than anticipated.

The Asia-Europe trade disappointed the most due to lower import from Asia to U.K., Turkey and Mediterranean, but lower than expected volumes were realized on most trades.

"Our profitability and cash flow is improving, positively impacted by the emergency-bunker surcharge announced due to the significant increase in bunker price, synergies from Hamburg Sud and strong collaboration between Ocean and our terminal activities," said Chief Executive Soren Skou."

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

November 14, 2018 03:11 ET (08:11 GMT)

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