High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
COPENHAGEN, Aug 12 (Reuters) – A.P. Moller-Maersk kept its downbeat 2016 profit forecast on Friday as the Danish shipping and oil giant reported net profit way under expectations as it struggles to cope with a shipping recession and tough oil markets.
The Danish shipping and oil group said net profit fell to $101 million in April-June, lagging a forecast of $196 million.
In June, Maersk fired their chief executive and announced plans to restructure the business, indicating it could split it into separate companies and sell off part of the group, including its oil division. The group named Soren Skou, head of Maersk Line, as its new group chief executive.
Maersk is fighting to remain the world’s leading container shipping carrier as a wave of mergers and acquisitions, particularly in Asia, creates new challengers trying to grab a bigger share of a depressed market.
The group kept its outlook for an underlying profit for the full year significantly below last years $3.1 billion.
A record number of around 150 container vessels are expected to be scrapped in 2016 but it will not be enough for an industry battling over capacity, low demand and falling rates, consultancy firm Drewry said in July. Imbalance between demand and supply is expected to persist in coming years.
German container shipping group Hapag-Lloyd said on Wednesday it dropped to a first-half operating loss of 39.7 million euros ($44.2 million) as disappointing freight rates hurt its business. (Reporting by Ole Mikkelsen; Ediitng by Alistair Scrutton)
(c) Copyright Thomson Reuters 2016.
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