COPENHAGEN: November 02, 2016. The A.P. Moller-Maersk Group reported a Q3 profit of US$438 million on a nine percent drop in revenue to US$9.17 billion.
Maersk Line swung to a loss of US$116 million from a profit of US$264 million for the same period last year. Revenue fell 11 percent to US$5.4 billion due to a 16 percent decline in freight rates.
The company said container freight rates declined the most in North America, West Central Asia and Africa, "but Oceanic and European trades were also notably lower".
The drop in North American average rates reflected increased competition, but was also impacted by a "mix effect" from increased backhaul volumes at lower rates.
West Central Asian trades were affected by the imbalance from oversupply in the past two years while African trades were mainly hit by weak demand, said Maersk.
Damco, together with Maersk Line now part of the group's Transport & Logistics Division, reported a net profit of US$15 million on a 12 percent drop in revenue to US$635 million in Q3.
Lower rates continued to put pressure on forwarding margins as air and ocean freight volumes grew five and 11.0 percent respectively over the same period last year.
The company said future growth would focus on developing IT solutions for its supply chain management services coupled with a concentration on selected trade lanes.
Commenting on the results, Maersk Group CEO Søren Skou said the Q3 result was "unsatisfactory, but driven by low prices". More details of the group's restructuring will be announced on December 13, he added.