Danish conglomerate AP Moeller-Maersk A/S (CPH:MAERSK-B), parent company of the world's largest container shipper, Maersk Line, on Friday hiked its profit guidance to $3.3 billion for the full year from $2.9 billion previously on prospects of higher demand. Shares soared more than 9 percent on the upward revision.
The conglomerate also reported an 11 percent drop in second-quarter profit, but analysts polled by Thomson Reuters had expected a 30 percent drop.
Moeller-Maersk attributed its losses in part to lower profits from its Maersk oil business, as oil prices declined and the company spent substantially on exploring for new oil sources.
The conglomerate's Maersk Line subsidiary posted a $439 million profit for the second quarter, up from $227 million last year, despite sharply lower shipping rates.
The company said the profit boost came chiefly from cutting costs in light of its falling revenues, for one by improving the efficiency of its fleets.
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The shipping line, often seen to measure the health of international trade, also revised its projections for the year to “significantly above” what it earned in 2012, based on the robust performance in the first half of this year.
“Global demand for seaborne containers is expected to increase 2-3% in 2013, lower on the Asia-Europe trades but supported by higher growth for imports to high growth markets,” said the company.
“The second quarter has been quite tough in terms of [freight] rates and volumes but we’ve been successful in improving our competitiveness,” company CEO Nils Andersen told CNBC Europe.
“When you look at the average results for the industry in the second quarter, the industry is not making any money,” he said. “Low rates are hurting the industry too much.”
Average freight rates fell by 13 percent, said the company.
Maersk Line's strong profits contrasts with the fortunes of smaller maritime shippers, like Thailand's Regional Container Lines PCL (BKK:RCL), which reported a net loss of $4.2 million on Thursday, after making a small profit in the same quarter last year.
RCL operates throughout Asia and the Middle East, with 41 container vessels travelling to more than 70 destinations.
Moeller-Maersk’s other businesses include operating ports, oil and drilling and running tankers. The group also announced the creation of a fifth unit, focused on services and shipping, which seeks to earn $500 million by 2016.