(Reuters) - Danish oil and shipping group A.P. Moller-Maersk (MAERSKb.CO) will not invest significantly in its shipping business over the next five years and will focus on its oil, drilling rigs and ports, the Financial Times reported on Monday.
“We will move away from the shipping side of things and go towards the higher profit generators and more stable businesses,” Maersk Chief Executive Nils Andersen told the newspaper.
“What we are going to do over the next five years, we are not going to invest significant amounts in Maersk Line. We have sufficient capacity to grow in line with the market.”
Maersk Line, the company’s container shipping unit, has struggled with profitability due to the global economic slowdown and an oversupply of vessels that could intensify next year. The subsidiary is a barometer of world trade as its fleet carries more than 15 percent of all sea-borne containers.
Ship owners are raising rates and cutting costs to cushion falling volumes as global trade slows.
A rebound in container rates returned Maersk Line to profit in the third quarter after four successive periods of losses, although Andersen warned earlier this month that the recovery does not mean there is no chance of a relapse for prices on some routes.
“When we have taken that shift, probably more than 50 percent of our capital will be tied in these three other businesses,” the FT quoted Andersen as saying, referring to the oil, drilling rigs and ports divisions.
“Maersk Line will then account for 25-30 percent of capital. We will have four businesses of almost equal size.” (Writing by Manolo Serapio Jr.; Editing by Chris Gallagher)