Nils Andersen, CEO Maersk: “Global Growth Slowing Down”
Nils Smedegaard Andersen, chief executive officer at A.P. Moeller-Maersk qoted by Bloomberg as saying: "We believe that global growth is slowing down. Trade is currently significantly weaker than it normally would be under the growth forecasts we see"
The world's biggest shipping line conducts a string of its own macro-economic forecasts and it sees less growth - particularly in developing nations, but perhaps also in Europe - than other people expect in 2015, Andersen said. Also for 2016, "we're a little bit more pessimistic than most forecasters."
His company is a bellwether for global trade, handling about 15 percent of all consumer goods transported by sea.
According to Andersen, the current operating environment is characterized by slow growth, but the real concern to be taken into account should be the overcapacity in the shipping market and slower than expected market growth.
He said that Maersk was taking the right steps by reducing costs and stopping investments for the time being.
“Another thing is that we have strengthened our balance sheet, brought down our debt and we have finalized the divestments of non-core businesses. Therefore, today we have the money to go and invest in interesting assets in our core businesses,” he added.
Despite the dire conditions, Maersk Line has been one of the most profitable shipping companies around and the third quarter results were in line with forecasts.
Maersk Line was hit the most by depressed freight rates, Andersen said that the company plans to defend its market position, which means that there will be periods when the company will take a bit of market share. However, Andersen stressed that the company would not order vessels that are not needed purely to meet the company’s growth ambition.
On the other hand, Andersen said that there has been a growth in the underlying volumes of containers transported by Maersk Line or handled at the Group’s terminal, reaching at least 30% growth, adding that over the past three years oil production and the number of rigs operated by the Group have also been increasing.
Despite a challenging market environment and a previous announcement that Maersk would idle a few of its massive Triple E liners, said Nils Smedegaard Andersen.
Andersen also said consolidation within the shipping industry, which is largely operated by unlisted state- or billionaire-owned companies, would be natural during the slump.