Lower oil and freight prices impact conglomerate AP Moller-Maersk

May 12, 2009, 12:05 GMT

Copenhagen - Lower oil and freight prices pushed down first- quarter turnover and profits, Danish shipping and oil concern AP Moller-Maersk said Tuesday.

Turnover, measured in dollars, declined by 24 per cent year-on- year to 11 billion dollars while the conglomerate reported a loss of 373 million dollars for the quarter.

In the corresponding business period 2008, the group posted a profit of 1 billion dollars.

'The global economic crisis and resulting lower demand for container shipping affected the container activities particularly negatively in the first part of 2009,' the group said.

The group that operates Maersk Line, the world's biggest container shipper, said ship transports fell 14 per cent during the period while average freight rates were 24 per cent lower year-on-year.

Concerning its outlook, the group said there was 'considerable uncertainty' citing how the global economy will develop and its effects on container freight rates, the exchange rate for the dollar and oil prices.

For full-year 2009, the group said it could not rule out a loss.

'The result is impacted by the extraordinary global recession, which affects all our markets negatively,' chief executive Nils S Andersen said in a statement, adding that cost-cutting measures would continue.

AP Moller-Maersk Group operations include sea transport, offshore oil and gas activities and retail and shipyard operations.

Year-on-year the oil price was 54 per cent lower but production increased 18 per cent, mainly over higher share of production in Qatar. Production in older oil fields in the Danish section of the North Sea, Britain and Algeria was down compared to last year.