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The world’s biggest container ship operator Maersk Line has announced that the group’s net profit in the first half of 2008 rose 37 per cent to around USD 2.5 billion, largely taking advantage of soaring oil prices.
The company, which pumps oil in the North Sea, Qatar and Algeria, said while the net effect of higher oil prices was positive so far this year, the general outlook for container activities for the second half is “highly challenging”.
“The group experienced significant movements in external factors impacting the net result, such as oil prices, exchange rates and a slow-down in the global economy, mainly impacting the container trade flows to the US and Western Europe,” it said.
“Driven by the higher oil prices, the energy-related activities…had good market conditions. The container related activities suffered from the higher bunker prices, the slow-down in global trade and significant new tonnage entering the global container vessel fleet.”
Regarding its sensitivity to changes in freight rates and volumes in the second half of 2008, the company projected a five per cent increase/reduction in average container freight rates would have an impact on the net result for 2008 of USD 520 million, with a five per cent increase/reduction in volumes would have an impact of USD 350 million.
It said oil prices were up 73 per cent on average, while its oil and gas production rose 15 per cent. While profiting from the high fuel prices, Maersk said rising bunker fuel costs could hurt its shipping profits as that cannot be passed on immediately to customers.
Remaining cautious on its outlook, the company said revenue is now expected to be in the order of USD 65 billion. Profit for the full year is projected to be around USD 4.0-4.6 billion, beating previous expectations of around USD 3.6 billion.
“The outlook for 2008 is still subject to significant uncertainly not least due to the development in the global economy. Particular uncertainties related to changes in container rates, transported volumes, oil prices and the USD exchange rate,” it said.
The company announced yesterday that it launched a $664 million bid for Swedish shipping company Brostrom.
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