Maersk sees slight pick up in container traffic next year

A shift in focus from market share to lowering costs has helped Maersk improve its profit margins. (Reuters)
Updated 15 November 2019

Maersk sees slight pick up in container traffic next year

COPENHAGEN: Shipping group A.P. Moller-Maersk sees scope for a slight pick up in global seaborne container traffic in 2020 compared with this year, with ongoing trade tensions limiting the chances of stronger growth.

Maersk, the world’s biggest container shipper, said on Friday that it expected global container demand to grow by 1-3 percent next after compared with
1-2 percent in 2019.

“The continued weakening of global sentiment, above all in the manufacturing sector, reduces the likelihood of a growth pick-up in 2020,” the company said in
a statement.

Despite headwinds from the US-China trade war, Maersk last month raised its expectations for 2019 profit, prompting its shares to jump more than 7 percent.

The company on Friday published a full set of results for the July-to-September period, reaffirming that it is on track to improve its profit margin albeit on slightly lower revenue.

The pick-up in profitability is driven by capacity management and cost control, with unit costs — the cost of moving a container on global seas — down 3 percent in the third quarter.

“We will continue our focus on profitability and free cash flow in the fourth quarter and into 2020,” CEO Soren Skou said in a statement.

Maersk has in several quarters struggled to keep costs under control amid low freight rates, rising fuel prices and a slowdown in container shipping.

As Maersk shifts its focus from market share to lowering costs, it said it expected underlying growth in its ocean business to be slightly lower this year than average market growth.

Skou has overseen a major shift in Maersk’s strategy, announced in 2016, which has included selling off its oil and gas business to focus on its container and logistics business for customers including Walmart and Nike. 


MoU signed to facilitate investment in Saudi Arabia

Updated 21 February 2020

MoU signed to facilitate investment in Saudi Arabia

RIYADH: The Saudi Arabian General Investment Authority (SAGIA) and the Diriyah Gate Development Authority (DGDA) signed a memorandum of understanding (MoU) to step up cooperation, the Saudi Press Agency reported on Thursday.

Under the MoU, the two authorities will establish a joint working group to boost cooperation in several areas including facilitation provided to investors, conducting economic studies of the market, building partnerships with commercial and industrial bodies and local companies, launching businesses, promoting the ease of doing business, providing logistic support, participating in local and international exhibitions, forums and special visits and exchanging knowledge and information.

All this will predominantly be in aid of attracting local and foreign investors. 

“SAGIA believes in the importance of such cooperation that can unify and multiply the efforts in a way that sets the world’s attention on the Kingdom’s cultural and heritage treasures and investment opportunities,” said SAGIA Gov. Ibrahim Al-Omar.

“This is done through close cooperation with DGDA to highlight these opportunities and market them internationally and locally. This MoU is a step in the right direction to achieve the objectives and directives of both bodies.”

Jerry Inzerillo, CEO of the DGDA, said: “Cooperating with SAGIA is one of the most important international investment motors to attract local and international investments to the Kingdom. This comes at a time where developing the Kingdom’s investment infrastructure is found within the objectives of its Vision 2030.

“At DGDA, we aim at attracting the best technologies and regional and international investments to the Kingdom. This will contribute to the improvement of the local economy and promote our objectives seeking to turn Diriyah into the Kingdom’s gem and an international economic tourist destination,” he added.