Denmark’s AP Moller-Maersk, which operates the world’s largest container shipping line, has revealed another huge share buy-back scheme a year after it launched its current programme.
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Maersk Line adjusted its mission statement from “grow with the market” to “growing at least with the market to defend its market-leading position” after posting a $499m net profit for the second quarter while quarter-on-quarter volumes grew above par at 3.7% to reach 5m teu.
Maersk posted better than expected results causing the companies shares to rise by 7%. Effective 14th September, MSC’s “Condor” service, which is jointly operated with Maersk Line between Asia and Europe will cease operation.
“It is very positive that they have kept the guidance for Maersk Line despite the lower freight rates”, said analyst Ricky Rasmussen from Nykredit Markets.
The container shipping industry has a reputation for competitive price cutting.
Maersk Line’s competitors include family-owned Mediterranean Shipping Company from Switzerland, French family-controlled CMA CGM, Hapag-Lloyd from Germany, Evergreen from Taiwan, Cosco Shipping and CSCL, both from China.
By controlling around 15% of the global market for container transport, Maersk Line is seen as a bellwether for global trade. Roughly 90 percent of the world’s goods are carried by sea with over 70 percent in containers.
For the full year, the group expects to report an underlying result of $4 billion as previously guided.
The company also announced its plans to buy back $1 billion worth of shares stating that the share buy-back “shows clear commitment of distributing returns to shareholders”, Moerkedal said.
Maersk Group has held its forecast of a $4bn underlying profit for 2015, despite oil price turbulence and falling container rates affecting its businesses. It lifted financial targets for Maersk Line to a return on invested capital (ROIC) of between 8.5 percent and 12 percent from a previous 8.5 percent.
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Maersk Oil contributed $217 million, from $315 million.
