Long cycle Industry-shipping (3)-Maersk Line 2014-year situation

First of all, we need to declare that this article is purely a small retail with no foresight and knowledge of ignorance, for reference only.

Maersk Line's 2014 profit of $2.3 billion global shipping container demand rises slightly

Guidance: Maersk Group today (February 25) released the 2014 full-year results, the performance data provided to reporters showed that the group's annual profit of 5.2 billion U.S. dollars, the group's history of the highest profit level, the actual profit of 4.5 billion U.S. dollars, compared with 2013 growth of 33%.
Maersk Group today (February 25) released the 2014 full-year results, the performance data provided to reporters showed that the group's annual profit of 5.2 billion U.S. dollars, the group's history of the highest profit level, the actual profit of 4.5 billion U.S. dollars, compared with 2013 growth of 33%.

Of these, Maersk Line, the world's largest container shipping company, contributed $2.3 billion to the group's earnings in 2014 (US $1.5 billion in the same period in 2013), again achieving a higher than expected annual results.

And this year shipping companies will be more than Maersk. China Cosco (601919) (601919,sh), also released its 2014 annual results announcement at the end of January, said it is expected to increase its shareholder net profit by more than 50% per cent in 2014.

UBS believes that the net interest rate for China Cosco 2015-year container service will continue to rise and compensate for the loss of its dry bulk business, with China Cosco expected to make a profit for the whole year, benefiting from a sustained decline in tariff increases and fuel prices since the end of 2014. Maersk is more optimistic about its 2015 shipping expectations and expects real profits to continue above 2014.

International consolidation business generally optimistic

As a benchmark for the global consolidation industry, Maersk Line said in its annual report that higher than expected annual results in 2014, on the one hand, the volume of goods higher than expected growth, the company continuously optimize the service network to achieve lower single box costs, lower fuel costs, the company's performance has a positive impact.

On the other hand, the downward tariff partly offsets the impact of the above positive factors. The company's real profits were also higher than expected at $2.2 billion ($ 1.5 billion for the same period in 2013), with a 11.6% return on investment (7.4% in the same period in 2013).

Looking ahead to 2015, Maersk Line expects global shipping container demand to grow 3-5%, the company will continue to strive to improve competitiveness by reducing the cost of single box and operating new things to the route network (2M), and thus expect the actual profit of 2015 shipping to continue higher than 2014.

UBS, which is also bullish on the 2015-pack shipping Outlook, has raised expectations for China's Cosco 2015 consolidation earnings.

UBS Securities released a study report, according to the Shanghai Export Container Freight index, estimated that the U.S. line tariffs increased by 25% in January this year, but by the Asia-Europe and Asia Airlines 25-27% the decline in part offset, is expected to 2015 average freight will increase 3%, fuel prices will decline 30% per cent, As a result, the net pre-tax interest rate on China's ocean container business will rise to 7.9% this year from 2.2% in 2014.

Domestic dry bulk cargo shipping loss or will be expanded

However, dry bulk shipping is still mired in consolidation compared to the continuous improvement in profitability.

In the 1 quarter of 2015, dry bulk freight prices further downward, the BDI index fell to 28 years old lows. The industry generally estimates that current tariffs can only cover the cash costs of most shipowners.

While Cosco has continued to cut dry-bulk shipments and tariffs are expected to pick up seasonally in the second half of the year, UBS Securities still believe that the net EBIT rate for China's ocean-going dry-bulk cargo is down from 2014-11.1% per cent to 20.2% in the current years. The loss of China's offshore dry bulk business is expected to narrow in 2016, but it will still be hard to make a profit by 2018.

This article is used only to express my often erroneous views and does not constitute any advice.

Long cycle Industry-shipping (3)-Maersk Line 2014-year situation