By Sabina Zawadzki and Ole Mikkelsen

COPENHAGEN, Nov 6 (Reuters) – Shipping and oil conglomerate A.P. Moller-Maersk stated on Friday third-quarter revenue virtually halved and world demand for container transportation this yr would develop at a slower tempo than beforehand anticipated.

The Danish firm, which operates the biggest container delivery enterprise on the planet, saved a diminished forecast made two weeks in the past for a 2015 underlying revenue of $3.4 billion, down from the $4.0 billion beforehand anticipated.

Maersk has taken a double hit to its companies — its oil items have floundered as crude costs halved since final yr, whereas low commerce volumes and an overcapacity of vessels have weighed on Maersk Line, the container delivery enterprise.

The earnings report, which confirmed third-quarter internet revenue virtually halved to $778 million from $1.5 billion a yr in the past, comes two days after Maersk Line stated it will slash prices, lower employees by virtually a fifth and pull out of some vessel orders.

On Friday, the corporate stated it now anticipated demand for seaborne container transportation all over the world to develop 1-3 p.c this yr, decrease than its earlier view of 2-4 p.c.

Growth in demand for delivery, at 1 p.c within the third quarter, is the bottom because the 2008 monetary disaster that hit the trade notably laborious. Maersk made an annual loss in 2009, the one yr it has misplaced cash in its 111-year historical past.

Though the worldwide financial system has recovered since, commerce volumes have risen at a slower tempo than prior to now and economists are more and more involved about flagging development in China.

Overcapacity has exacerbated that scenario – in 2015, Maersk expects a 9 p.c development in container delivery capability, outstripping the round 1-3 p.c development in commerce.

That results in a hunch in freight charges. On the busiest routes on the planet, from China to Europe, spot charges this yr have been at barely worthwhile ranges. This week they fell 32 p.c to $674 per container, a supply with entry to knowledge from the Shanghai Shipping Exchange informed Reuters.

Despite the dire situations, Maersk Line has been some of the worthwhile delivery corporations round because of its scale and price chopping, and the group’s third quarter outcomes had been in step with forecasts.

“Maersk is definitely under pressure at this hour, but this is an absolutely worst case scenario situation, so I’m quite optimistic because Maersk is still able to generate 3.4 billion (dollars) in profit in such a year,” stated Sydbank analyst Jacob Pedersen. “Maersk is still in front in the market.”

At 1135, GMT shares in A.P. Moller-Maersk had been up 0.3 p.c, in contrast with a 0.6 p.c fall in Europe’s blue-chip index

CONSOLIDATION?

Chief Executive Nils Smedegaard Andersen stated consolidation inside the delivery trade, which is basically operated by state- or billionaire-owned corporations, could be pure throughout the hunch.

“We have for several years expected consolidation. It has not happened but it would be a natural thing since many players are loss-making,” he stated throughout a convention name.

The trade is awash with consolidation discuss. Shares in China’s Cosco have been suspended since Aug. 10 and trade insiders anticipate its container delivery unit to merge with China Shipping Container Lines (CSCL) to create the fourth largest delivery firm on the planet.

Meanwhile, Singapore’s state investor has put its majority stake in Neptune Orient Lines (NOL) up on the market, with delivery trade web sites reporting {that a} tie-up with newly-listed Hapag-Lloyd was within the offing.

South Korea’s authorities has additionally requested Hanjin Shipping to search for a accomplice, stated Jan Tiedemann, an analyst with delivery consultancy Alphaliner.

“(Consolidation) will have a huge knock on effect as all of these carriers have alliances. That would be the end of the alliance as some will be too big for regulatory reasons or too small to compete,” he stated. “It’s very difficult to see what the global shipping landscape will looks like.” (Additional reporting by Annabella Nielsen; Editing by Mark Potter)

(c) Copyright Thomson Reuters 2015.

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