According to the largest container shipping company in the world (by revenue), the worldwide shipping industry finally looks to be in a great place. Analysts agree that the entire shipping sector is coming back strongly from a tough economic downturn, and is shrugging off new issues related to Russian sanctions.
Moller-Maersk, the Danish shipping and oil group, reported second quarter net profits that surpassed its previous forecasts. The shipping giant said that this strong growth was attributed to a growing demand for container transportation, which in turn increased profits and encouraged them to raise the company’s forecast for the year. According to recent reports, container shipping volume increased by 6.6 perfect in the quarter (year over year), compared to the same quarter in 2013.
It is a bellwether for global trade to a large extent, simply by virtue of its status as the world’s largest container shipping line.- Analyst for Macquarie Securities
Moller-Maersk has announced second-quarter net profits of $2.25 billion, which beat the set expectations of $2.21 for the financial period. The shipping unit of the firm, better known as Maersk Line, also performed better than expected. This unexpected performance prompted the company to increase its 2014 underlying profit projection by half of a billion dollars, rising to $4.5 billion from the previously announced figure of $ 4.0 billion.
Group CEO Nils Smedegaard Andersen has gone on record to state that the results were very satisfactory for the first half of 2014 and are in line with the company’s prediction that shipping revenues this would far surpass those from the dismal performance in 2013.
This quarter we have benefited from a pretty good pickup from the Asia to Europe trade.- Maersk CEO
According to officials, the company has been better able to manage the shipping line’s container capacity, thereby allowing Maersk Line to outperform the market and all of its competitors.
Tensions are high around Russia, who is still reeling from the repercussions of sanctions imposed by Western countries following the issues with Crimea back in March 2014. Analysts expect that this political and economic turmoil could possibly affect the company’s revenues. Nevertheless, Moller-Maersk announced that it will buy back $1 billion in shares in the coming 12 months.