A.P. Moeller-Maersk A/S, owner of the world's largest container line, may post a full-year loss for the first time in at least half a century after freight rates declined because of falling trade.
Maersk had a first-quarter net loss, including minority interests, of 2.13 billion kroner (US$390 million) compared with profit of 5.22 billion kroner a year earlier, the Copenhagen-based company said in a stock-exchange statement. The loss was wider than the 821 million-krone median estimate of nine analysts surveyed by Bloomberg. Sales dropped 12 percent to 63 billion kroner.
Maersk Line, which owns more than 450 vessels with combined capacity of 1.9 million containers, has lost money while adjusting to the global economic slowdown and increased competition on trade routes. The company said today it expects to report a loss in the second quarter and "can't rule out" losing money for the whole year.
"It was a weak report and it shows that Maersk has a long way to go before its container business gets out of this very difficult situation," Karsten Sloth, an analyst at Silkeborg, Denmark-based Jyske Bank A/S, said in a telephone interview. He has an "accumulate" rating on the stock.
Global trade may plunge 9 percent this year, the most since World War II, as the recession deepens, the World Trade Organization predicted March 23. Maersk hasn't posted a full-year loss since "at least World War II," Per Moeller, chief accountant at the 105-year old company, said by phone.
Maersk's container line reported a US$559 million net loss in the quarter compared with an US$80 million profit the year before. Maersk's shipping volumes fell by 14 percent in the quarter, while freight rates dropped 24 percent on average.
"The result is impacted by the extraordinary global recession, which affects all our markets negatively," Chief Executive Officer Nils Smedegaard Andersen said in a separate statement. "We will continue our efforts to strengthen Maersk Line's competitiveness, building the strength of our people and organization, reducing costs and improving our environmental record."
Short selling is used by investors who borrow a stock and sell it, betting the share will decline. They later have to close the bet, repurchasing the stock to give it back to the owner.
The shares have gained 19 percent this year, giving the company, Denmar's biggest by sales, a market value of 146.4 billion kroner.
The oil and gas business, Maersk's biggest profit contributor in the past three years, recorded a 39 percent drop in first-quarter net income to US$36 million as oil prices fell.
Maersk said earlier this year that it aims to raise prices from "unsustainable" levels and the company announced a US$1 billion spending-cut target on March 18.
Maersk had a first-quarter net loss, including minority interests, of 2.13 billion kroner (US$390 million) compared with profit of 5.22 billion kroner a year earlier, the Copenhagen-based company said in a stock-exchange statement. The loss was wider than the 821 million-krone median estimate of nine analysts surveyed by Bloomberg. Sales dropped 12 percent to 63 billion kroner.
Maersk Line, which owns more than 450 vessels with combined capacity of 1.9 million containers, has lost money while adjusting to the global economic slowdown and increased competition on trade routes. The company said today it expects to report a loss in the second quarter and "can't rule out" losing money for the whole year.
"It was a weak report and it shows that Maersk has a long way to go before its container business gets out of this very difficult situation," Karsten Sloth, an analyst at Silkeborg, Denmark-based Jyske Bank A/S, said in a telephone interview. He has an "accumulate" rating on the stock.
Global trade may plunge 9 percent this year, the most since World War II, as the recession deepens, the World Trade Organization predicted March 23. Maersk hasn't posted a full-year loss since "at least World War II," Per Moeller, chief accountant at the 105-year old company, said by phone.
Maersk's container line reported a US$559 million net loss in the quarter compared with an US$80 million profit the year before. Maersk's shipping volumes fell by 14 percent in the quarter, while freight rates dropped 24 percent on average.
"The result is impacted by the extraordinary global recession, which affects all our markets negatively," Chief Executive Officer Nils Smedegaard Andersen said in a separate statement. "We will continue our efforts to strengthen Maersk Line's competitiveness, building the strength of our people and organization, reducing costs and improving our environmental record."
Short selling is used by investors who borrow a stock and sell it, betting the share will decline. They later have to close the bet, repurchasing the stock to give it back to the owner.
The shares have gained 19 percent this year, giving the company, Denmar's biggest by sales, a market value of 146.4 billion kroner.
The oil and gas business, Maersk's biggest profit contributor in the past three years, recorded a 39 percent drop in first-quarter net income to US$36 million as oil prices fell.
Maersk said earlier this year that it aims to raise prices from "unsustainable" levels and the company announced a US$1 billion spending-cut target on March 18.