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COPENHAGEN: May 17, 2018. A.P. Møller - Mærsk has reported a 30 percent increase in Q1 revenue to US$9.25 billion, or a rise of 10 percent excluding Hamburg Süd, and an “unsatisfactory” underlying loss of US$239 million - 72 percent more than the same period last year.

Notwithstanding “increased uncertainties due to geopolitical risks, trade tensions and other factors impacting freight rates, bunker prices and rate of exchange,” Maersk Group CEO Søren Skou said it still expected a 2018 underlying result in excess of the US$356 million earned last year.

Without elaborating how, Skou said Maersk is implementing a number of short-term initiatives to improve profitability.

Maersk blockchainA new financial reporting structure has been introduced to reflect a goal of growing disproportionately Maersk’s non-ocean business via four segments: Ocean, Logistics & Services, Terminals & Towage and Manufacturing & Others.

Q1 ocean revenue rose 38 percent to US$6.8 billion - or 9.0 percent excluding Hamburg Süd. Overall volumes rose 2.2 percent compared to forecast global demand of 3.0­4.0 percent.

EBITDA only increased US$8 million to US$492 million in the period due to “adverse developments in bunker price and foreign exchange rates as well as [the] Hamburg Süd portfolio mix”. Maersk said the Hamburg-based carrier reported an EBITDA of US$88 million in the period.

Commenting on the market, the company noted a slowdown in demand year-on-year, reflecting a weakening momentum in the global economic environment driven by soft global retail sales.

Container demand on the East-West trades softened in Q1 2018, partly driven by weaker imports in the US following high growth rates in previous quarters. European import growth also slowed due mainly to a decline in retail sales growth.

Meanwhile, Asian imports from the US and Europe dropped significantly - reflecting the ongoing Chinese ban of waste and scrap materials as well as a gradual slowdown of the country’s economy.

Demand on North-South trades continued to strengthen considerably during the period, mainly in parts of South America and Africa. Maersk said the development reflected an economic stabilisation in Brazil, Argentina and Nigeria but also resulted “from a strong correction in inventory dynamics following sharp reductions in preceding years”.

(Pictured: Maersk’s first block train departed Wuhan in China’s Hubei Province for its 10,815 kilometre journey on October 28, 2017 and arrived in Northern France 20 days later.)

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