Maersk Line has reported that its first quarter result stood at US$37m, 94.9 per cent lower than the same period of 2015 (US$714m), attributed to weak demand and record low freight rates.
According to the shipping giant, he first quarter of 2016 was characterised by a continuation of the global rate war in container shipping, driven by weak demand and significant supply growth.
“We improved our financial performance compared to the fourth quarter in 2015 despite continued drop in prices," said Maersk Line chief executive Søren Skou. "However, our first quarter result is not satisfactory, though as expected.
"In a market with record low freight rates, we won market share, drove down cost and continued to deliver positive free cash flow, enabling us to fund our own growth,” he added.
Revenue for the three-month period was US$4.97bn, 20.5 per cent lower thanthe first quarter of 2015 (US$ 6.25bn), while average freight rates decreased by 25.5 per cent – hitting record low levels.
“We expect the market to pick up towards the third quarter of 2016," Skou added. "Our network is now operating with very high utilisation and our vessels are full in the Asia-Europe trade. In this quarter, we expect some upward price momentum ahead of the traditional peak in the third quarter."