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Maersk Group profit falls 86pc to US$224 million, revenue slips 19pc

MAERSK Group's first quarter year-on-year profit declined 86 per cent to US$224 million, drawn on revenues of $2 billion, down 19 per cent, the company reported.

Maersk Line, the world's biggest container carrier, posted a 94 per cent decline in net profit to $37 million, a fall blamed on weak freight rates, which dropped 26 per cent.



The first-quarter results "were a relief" to Frode Moerkedal and Herman Hildan, analysts at Clarksons Platou Securities in Oslo. 



"Maersk Line was still in the black despite record low freight rates and the company probably took market share," they said, Bloomberg reported.



"The main surprise from the report was cost reductions seen in Maersk Oil and Maersk Drilling, and both companies reported significantly better operating profits than expected," they said.



The results were "not as bad as feared following cost savings," David Kerstens, an equity analyst at Jefferies International said in a note. 



"We think there's light on the horizon with the current turmoil in the container shipping industry potentially resulting in the elimination of industry overcapacity," he said.



Said group CEO Nils Smedegaard Andersen: "While market conditions remain challenging, we continue to adjust our cost base to the new conditions and maintain a good operational performance across our businesses."



Because of cost cutting, Maersk Oil "now expects a break even result to be reached" with an oil price of $40-45 per barrel".



Maersk Oil reported a net operating loss after tax of $29 million in the quarter, compared with a profit by the same measure of $208 million a year earlier. The loss was smaller than the $58 million predicted in a survey by Ritzau.



The unit, which has cut 1,300 jobs, targets cutting costs by 20 per cent by the end of this year, compared with 2014 levels.
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