A.P. Moeller-Maersk ’s container shipping line, the world’s largest, said first-quarter profit more than doubled and the forecast was raised on lower costs and higher volumes countered a drop in freight rates.
Net income at Maersk Line rose to $454 million in the three months through March from $204 million a year earlier, the Copenhagen-based company said May 21.
Maersk Line, which transports about 15% of the world’s containers, has been battling industry overcapacity after a boom in ship orders collided with the global financial crisis, triggering the worst slump in prices for carrying cargo since containerization became global in the 1970s.
Earnings before interest and taxes at parent company A.P. Moeller-Maersk rose to $2.24 billion.
The company said it expects its 2014 net income to be “above” the 2013 result compared with a previous forecast of a result “in line” with last year’s $1.5 billion profit.
The higher expectations are “driven by improved operational performance and utilization,” the company said.
Parent Maersk said it expects 2014 underlying profit, which excludes discontinued operations, impairment losses and divestment gains, will be about $4 billion, up from a previous estimate of about $3.6 billion.
Freight volumes increased 7.3 % in the quarter, and rates declined 5.1 %. Unit costs fell by 9 %, the company said.