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Opinions and views from expert CFOZone members.


Aug 19
2010

Shippers’ results show growth in global trade

Posted by dbedell in tradeshippingprofitsgrowthglobal economycontainer shippingCash

dbedell

Strong profit figures from a number of the world’s largest container shippers are the latest indicators that global trade is indeed on the increase.

Three of the biggest shipping container lines have each reported stronger-than-expected results in their latest reporting periods, sending a big signal that world trade is on the rise—as we discussed here. Shipping containers carry around 90 percent of global merchandise trade goods.

However, there are a number of factors that have influenced container shipping results-not just increased trade volumes-including decreased container numbers. And the companies caution that the first half level of trade growth may not be sustainable during the second half of the year.

Copenhagen’s Moller-Maersk reported a return to profit for the first half of 2010—with $2.39 billion in net profit June 30, up from a loss of $655 million for the same period last year.

Shipper DP World—out of Dubai—also saw strong profit growth in the first half of this year. Net profit after tax grew 10 percent to $206 million—from $188 million over the same period in 2009.

And Neptune Orient Lines also reported higher profits for the second quarter. The shipping firm from Singapore reported profits of $100 million in the latest quarter—compared with a loss of $146 million in the second quarter last year.

All three companies cited shipping container volume growth as part of the reason for strong results, and much of the growth that is being seen is driven by increasing trade volumes to and from the emerging markets.

However, in their results announcements, both Maersk and DP World cautioned that the sustainability of trade growth in the third quarter remained uncertain, as European and global economic growth forecasts hold some volatility.

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