zoomImage Courtesy: Maersk Line

Due to a decline in freight rates, the Danish shipping giant Maersk Line has reported a loss of USD 116 million in the third quarter of 2016, down by USD 380 million from USD 264 million seen in the same period in 2015.

The company’s revenue for the quarter decreased by 11% to USD 5.35 billion from last year’s USD 6 billion.

However, the carrier’s volumes were 11% higher, rising to 2,698k FFE from 2,427k FFE, as Maersk Line was able to win market share, while its capacity grew by 3.8%.

The shipping firm aid that it maintains its 2016 full year expectation of a significantly lower underlying result than USD 1.3 billion seen in 2015 with the specification that the underlying result is expected to be negative.

“In the third quarter we made a loss, which is unsatisfactory. However, we continue to deliver on our growth and cost objectives. We won market share, we continue to take out cost and increase our utilisation,” Pierre Danet, CFO of Maersk Line, said.

Compared to the three-month period of 2015, Maersk Line’s average freight rate declined with 16%. However, for the first time since the second quarter of 2014 it increased quarter-on-quarter with 5.5%.

“We have indications that rates may have bottomed out. Compared to the previous quarter, our rates increased, which is something we have not seen in the last two years. Furthermore, we expect that the more balanced supply and demand situation will lead to a more sustainable industry. So there are definitely encouraging signs,” Danet said, adding that the market situation “is still very challenging.”