Maersk reports significant revenue loss for 2011

APM-Maersk has reported an operating (EBIT) loss of $386 million for its container shipping and logistics activities for 2011.

According to the Paris-based consultancy, Alphaliner, the poor performance was largely due to a record operating loss of $603 million in the fourth quarter, which was the worst quarter for the carrier on record surpassing even the recession in 2009. The fourth quarter EBIT margin reached –8.8 percent, only slightly better than the 2009 quarterly performance.

APM Maersk Container Activities by Quarter 2008-2011 (Including Maersk Line, Safmarine, MCC, Seago Line and Damco) For the first time, the group also broke down its full year earnings of its liner business from its logistics business.

“Of the $386 million operating loss in 2011, Maersk’s liner business share of the loss was -$483 million while its freight forwarding and supply chain management services offered through Damco contributed an operating profit of $97 million,” said Alphaliner’s commercial director, Stephen Fletcher.

However, APM-Maersk failed to provide quarterly breakdowns which would have allowed comparisons against previous years. Maersk attributed the poor liner results mainly to the low rates on the Asia–Europe trades. The company said that “freight rates started the year at a reasonable level, but decreased throughout the year as large amounts of new tonnage was delivered.”

Overall freight rates fell by 8 percent in 2011 with the Asia-Europe rates suffering the steepest decline at 19 percent. The Asia-Europe trade accounts for 39 percent of Maersk’s total liftings last year.
Maersk’s total container liftings increased by 11 percent to 16.22 million twenty-foot equivalent unit (TEU), growing at a rate that was above the market average and allowing it to gain market share. However, the company said that its focus this year “is moved towards profitability ahead of further market share gain.”

It forecast that the liner business will remain unprofitable in 2012 despite the recent attempts by carriers to raise rates on the Far East/Europe routes.