The Southwood Group are advising clients on A.P Moeller-Maersk A/S as the world's largest shipping line announces rising earnings forecasts for the year.
The largest shipping line in the world Maersk has seen a dramatic rise in share value following from the release of better than expected earnings reports. The line, which had previously reported that they expected earnings to be closely matched to those of 2012, was compelled to raise their figures after what has been a very successful year so far for the company.
"The Copenhagen based Maersk reported a net income of $439 million for the three months to June with this figure dramatically eclipsing figures for the same period last year of $227 million. The line has achieved these results despite an overall fall in shipping volume globally, with gains attributed to lower fuel costs and company restructuring. Maersk has made all the right moves over the last twelve months implementing their new strategy that has enabled the company to reap the rewards. The new strategy entailed the replacement of slow ships that cost more to run and suffered expensive repairs, a bold undertaking for the company stretching capital holdings, the transition was aided by cheaper fuel costs enabling the company to offset the costs, bold strategies often beget bold gains as is the case here," said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
The shipping giant whose main route is Asia to Europe has managed to cut operating costs by 12.7% ahead of what the line expects to be a 2-3% rise in seaborne cargo volume throughout the world. Maersk's size and its ability to turn profit even in adverse economic conditions have made the company's stock well sought after with gains of 7.2% in trading following the reporting of their figures, this being the largest single day gain since November 2011.
"Astute investors always look to how a company performs under less than ideal conditions before they invest, Maersk has not only survived the shipping decline, but has also positively thrived, emerging on top and what appears to be in even better shape. The recent figures announcement and restructuring of the company gives investors new found reassurance, they are a shipping line that will make the best of even the most modest upswing in trade and we will continue to advise our clients as to the best strategy to add this holdings to their diversified portfolios," said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
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