Maersk Line is expected to be among next year’s top performers, according to the French firm Exane BNP.
The bank’s analysts keep optimistic about the carrier’s future with the addition of Hamburg Süd. With a deal that is reportedly worth between $3 billion and $5 billion, the recent acquisition is going to increase the company’s market share to 18.6% and a 20% of capacity.
“The tide is turning, and for 2017 our stance is…that unless freight rates collapse, Maersk Line profitability will rebound,” the analysts noted in a report dated Nov. 30.
In 2016, Maersk Line’s revenues fell from $40 billion in 2015 to an estimated $36.2 billion this year, after shipping rates and oil prices collapsed. The landscape for 2017 seems to be different. According to Exane, revenues will improve to $39,2 billion.
If current spot rates continue through 2017, the price Maersk Line earns for shipping each TEU would increase by an average of $100. This would move Maersk Line into a $2 billion net profit for 2017.
In 2016, net profits declined from $4.28 billion to a likely $1 billion. However, in 2017 Exane expects net profits to boost to $2.79 billion.
The analysts also said that Hanjin Shipping’s collapse in August took about 3% of the capacity out of the market, but that event didn’t affect Maersk Line, as 2/3 of its fleet are on contracted rates. That situation is going to change in a few quarters, as Maersk Line rolls over its contracts at higher rates.
About the possible combination of Maersk Oil with the oil unit of DONG Energy (Denmark’s largest energy company), the analysts explained that Maersk could be an ideal partner for Dong: “The combination of the two units would create a mid-sized energy group worth about $10 billion, including debt that could then be spun off.”