Maersk Line will defend its top market position -CEO

Shares in Denmark’s A.P. Moller-Maersk (MAERSKb.CO) jumped as much as 8.6 percent on Thursday after the shipping and oil group reported second-quarter profits ahead of forecasts and launched a $1 billion share buy-back programme.

The world’s biggest container-shipping operator by capacity adapts to persistently low crude prices and stiff competition in the cargo market. Afterward, the company decided to price more dynamically to fight back. The company, which in recent decades expanded to countries including Algeria, Angola and Qatar, can find the best value in the tight chalk reservoirs of the North Sea, where it has a market-leading advantage with its oil-retrieving technologies, the chief executive said. The loss at the start of the year was corrected in the second quarter when Maersk focused on retaining its edge, he said, enduring less financial pain than first feared in a period when prices continued to fall.

“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. Roughly 90 percent of the world’s goods are carried by sea with over 70 percent in containers. Group net profit halved to $1.1bn in the quarter, but the decline was not as bad as forecast thanks to an improvement in the oil business and a stronger than expected result from Maersk Line. Maersk Line combined with Mediterranean Shipping Company (MSC), creating 2M Alliance and reducing seriously the cost per transported container on routes in Asia, Europe and Africa.

The $1.1 billion amount underlies a decrease in Maersk Line, Maersk Oil and APMT, with increases seen for Maersk Drilling and APM Shipping Services.

“We absolutely have appetite for acquisitions”, Nils Smedegaard Andersen said yesterday.

The Copenhagen-based group said Thursday it expects an underlying result for 2015 of around $4.0 billion, and reiterated that its strategy was “to become a premium conglomerate”.