Maersk profits double on higher freight rates-Xinhua

Maersk profits double on higher freight rates

Source: Xinhua| 2022-08-03 19:48:16|Editor: huaxia

COPENHAGEN, Aug. 3 (Xinhua) -- Danish shipping giant A.P. Moller Maersk said on Wednesday its earnings more than doubled in the second quarter as freight prices surged due to bottlenecks in the global supply chain.

Driven by high container freight rates, Maersk recorded 8.6 billion U.S. dollars of profits in the second quarter, compared with 3.7 billion U.S. dollars for the same period of last year, according to the company's Q2 financial report released Wednesday.

It said the outcomes were influenced by the results of ongoing exceptional market conditions and ongoing momentum from the strategic transformation with an integrated logistics focus.

"We delivered an exceptionally strong result for the second quarter and consequently recorded the 15th quarter in a row with year-on-year earnings improvements," said CEO Soren Skou in the report.

The company's revenue rose to 21.7 billion U.S. dollars in the second quarter, up from 14.2 billion U.S. dollars a year earlier.

Freight rates softened marginally over the quarter but remained at a high level historically as supply chain congestions increased across the globe, said the report.

High freight rates helped the international container logistics company achieve profits of 15.4 billion U.S. dollars in the first six months of 2022 while the annual profit for the whole of 2021 was 16.5 billion U.S. dollars.

"The result was driven by strong contract rates in Ocean, rapid profitable growth in logistics and continued solid performance in terminals," said Skou.

Maersk expects, however, a gradual normalization of market prices as supply chain bottlenecks are cleared by the end of the year, citing a Chinese initiative.

"Chinese authorities have allowed Maersk to conduct international cargo relay in China, making it the first foreign carrier to perform transshipment between two Chinese ports," said the report.

This initiative, according to the report, is expected to improve services through optimized networks and address some of the factors causing bottlenecks in Chinese supply chains by shortening transit times, cutting emissions and freeing up additional capacity.