The world’s largest container line earned a fourth-quarter profit of $313 million, down 6.5 percent from $335 million in the same quarter of 2012 on revenue that declined by 1 percent to $6.45 billion.

　　The Danish carrier’s full-year 2013 profit of $1.51 billion was 228 percent higher than the $461 million it earned in 2012.

　　Full-year revenue declined by 3.4 percent to $26.1 billion, however, because of lower freight rates, but Maersk said it was able to boost profits through “stringent” cost savings from vessel network efficiencies and improved vessel utilization.

　　The carrier’s average freight rate dropped 7.2 percent year-over-year to $2,674 per 40-foot-equivalent unit, but it was able to partially offset the decline by a 4.1 percent increase in the volume of containers it shipped, to 8.8 million FEUs. It said volumes on the Asia-Europe trade improved in the second half of 2013, and increased 5 percent for the full year, while trans-Pacific volumes only grew 2 percent.

　　Maersk said new container ship deliveries last year resulted in an 8.4 percent increase in fleet capacity. Even though the industry cut the effective capacity growth through slow-steaming and scrapping, it was not enough to balance it with what it called “modest” head-haul demand growth. Maersk said it minimized the impact of lower freight rates by idling vessels throughout the year, slow-steaming and skipped sailings. It also got help from an almost 10 percent year-over-year drop in its average bunker fuel price tof $595 per metric ton. Cost controls enabled it to realize a 10.5 percent year-over-year decline in the unit cost of shipping a 40-foot container to $2,731.

　　Little change expected for 2014

　　Maersk expects its 2014 results to be in line with those of 2013. It anticipates global demand will increase by 4 to 5 percent, compared to 3.5 percent last year. But it cautioned that overcapacity is likely to again depress freight rates and that it won’t be able to achieve the same unit cost savings it did in 2013.

　　“The challenging demand side is coupled with a significant amount of new tonnage delivered, corresponding to a capacity increase of 9.8 percent” in 2014, Maersk said. “Thus, without significant capacity adjustments, the container-shipping market is most likely expected to see a continued downward pressure on freight rates in 2014.”

　　Industry analysts have already begun to cut their forecasts for capacity growth in 2014 — for example, Alphaliner now projects a net increase of 5.5 percent — but it is still expected to outpace growth in demand.

　　Mixed results at other A.P. Moller-Maersk subsidiaries

　　Maersk Line parent A.P. Moller-Maersk earned a full-year profit of $3.78 billion, a drop of 6.5 percent from $4.038 billion in 2012, as revenue declined by 4 percent to $49.5 billion. It said the underlying profit improved in all its businesses except Maersk Oil.

　　APM Terminals earned a fourth quarter profit of $222 million, up almost 40 percent year-over-year on revenue that increased 5.7 percent to $1.1 billion. APM Terminals handled 36.3 million 20-foot-equivalent units last year, a 3 percent increase in volume year-over-year.

　　Its full-year profit increased 9.8 percent to $770 million on an almost 30 percent increase in revenue year-over-year to $4.3 billion.

　　A.P. Moller-Maersk’s logistics units Damco reported a full-year loss of $111 million, compared with a $55 million profit in 2012. The company said the loss was caused by one-time costd in transforming the business.

(Source:JOC)