Danish shipping and oil group A.P. Moller-Maersk said lower oil prices that translated into low fuel costs for its vessels more than compensated for a drop in container freight spot rates.
“In the first quarter the falling freight rates were more than compensated by lower costs in bunker fuel as a result of lower oil price,” Chief Executive Nils Smedegaard Andersen told journalists on a conference call.
He added the group’s container shipping business Maersk Line – a global leader – lost market share in the quarter but that he was not concerned by that.
Maersk Q1 beats forecasts, lifts 2015 forecast slightly
A.P. Moller-Maersk reported first-quarter net earnings above forecasts on Wednesday as the decline in shipping fuel costs more than offset a drop in freight rates.Image Credits: maerskline.com
The net result was also helped by income from the sale of a stake in Danske Bank, the country’s largest lender, while lower oil prices weighed on the conglomerate’s oil production unit.
The group said it now expects a full-year underlying result of around $4 billion, a slight upgrade from its earlier guidance for a result “slightly below” $4 billion.
Denmark’s largest company by revenue said net profit rose to $1.57 billion in January-March from $1.13 billion a year ago, beating a forecast of $1.13 billion.
Revenues fell in the quarter to $10.5 billion from $11.7 billion a year ago, slightly below expectations of $10.9 billion.
“The bottom line looks better than expected but there are two causes; firstly the divestment of Danske Bank counts in more positively than expected; and secondly a 170 million dollar deferred tax income due to a lower oil tax in the U.K,” Nykredit analyst Ricky Rasmussen said.
Maersk said it would sell its long-held 20 percent stake in Danske Bank in February when it announced its full year results.
(Reporting by Ole Mikkelsen; additional reporting by Teis Jensen; Writing by Sabina Zawadzki; Editing by Balazs Koranyi, )
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