Shipping giant AP Moller — Maersk has posted a sharp increase in second-quarter earnings as congestions and bottlenecks continue to drive up shipping rates.

The company last week reported a net profit of US $3.75 billion, up from the US $443 million recorded in the prior corresponding period, when results were weighed down by the economic downturn caused by the novel coronavirus pandemic.

Revenue also rose to US$14.23 billion, up 58 per cent, while earnings before interest, taxes, depreciation and amortisation tripled to US$5.1 billion.

For the period under review, volumes in the core ocean divison were up 15 per cent and average freight rates up 59 per cent.

Recently, a combination of rising retailer orders and slower turnaround rates due to COVID-19 outbreaks in several countries has driven freight rates higher.

Rates from China to the US are upward of US$20,000 per 40-foot containers, up more than 500 per cent from a year ago, according to freight-tracking firm Freightos.

Maersk further indicated in the preliminary financial report that it expects third-quarter earnings to outpace the second quarter’s, and the current momentum to continue into the fourth quarter.

The company’s CEO Soren Skou said, “I am pleased with the strategic progress we have made and the high value generation. We continue to build a higher quality ocean business with more long-term contracts, a rapidly growing logistics business, and a value creating terminals business. Our exceptional earnings and high cash flow enable us to further accelerate our transformation, invest in growing our activities, also through acquisitions and at the same time return cash to shareholders”.

Maersk also announced the acquisition of parcel shipping companies Visible Supply Chain Management and B2C Europe, as part of its plans to expand the company’s operations into the business-to-consumer (B2C) services, as well as grow its e-commerce capabilities. The total enterprise value for the two transactions was placed at US$924 million.

Fast-changing consumer buying patterns and digital platforms are accelerating online consumption, redefining business models across the globe. Maersk noted that many of its customers are seeing strong e-commerce sales growth. The two acquisitions are designed to address this customer trend.

Visible SCM, headquartered in Salt Lake City, Utah, enables e-commerce businesses to ship and deliver. It operates nine fulfilment centres in the US, handling 200,000 orders a day and enables 200 million parcels a year through its proprietary technology solutions. B2C Europe’s core offering is in parcel delivery services for both retailers and brands as well as for logistics operators, with a focus on cross-border deliveries. It operates a multi-carrier platform with a significant reach and volumes into all European countries through an extensive carrier network.

Logistics and services is a fast-growing portion of Maersk’s business growing 38 per cent revenue growth to US$2.2 billion in the second quarter and its earnings before taxes more than tripled to US$153 million, but it remains a small part of the business compared to the ocean shipping operations.

Amid its improving financial performance over the last nine months, Massy Holdings Limited has indicated that it will seek to cross list on the Jamaica Stock Exchange (JSE) by January 2022 following the appointment of its financial advisors.

Massy, a Trinidad-based group of companies, will join Guardian Holdings Limited (GHL) as one of the largest capitalised companies on the JSE when it eventually cross lists. Massy can list through introduction as GHL did, raise additional capital through a secondary market offer or list through the sale of shares by an existing shareholder(s). Massy’s stock price is up 33 per cent year to date at TT$81.15 ($1,792.60) with a market capitalisation of TT $7.98 billion ($181.56 billion) on the Trinidad and Tobago Stock Exchange.

Massy’s third quarter (June 30) revenue jumped by 23 per cent to TT $2.69 billion which was led by its home market which posted a 11 per cent improvement in third-party revenue to TT $986.49 million. Apart from Jamaica and Guyana which posted double-digit rise in revenues plus Colombia’s triple-digit growth, Barbados, the Eastern Caribbean and other markets performed lower relative to the comparative period. Trinidad and Tobago was under lockdown from May 3 to July 12 while Colombia and St Vincent and the Grenadines experienced issues locally at the time.

Consolidated net profit from continuing operations was 30 per cent higher at TT $125.88 million which was partially influenced by the TT $71.6 million gain on the sale of Roberts Manufacturing Limited and Massy Pres-T-Con Holdings Limited during the quarter. Consolidated net profit from continuing operations for the nine months is 22 per cent higher at TT $432.07 million with earnings per share at TT $4.11 relative to TT $3.37 in the prior period. When factoring in discontinued operations, Massy’s consolidated net profit totalled TT $500.30 million over the nine months. Except for motors and machines, the rest of Massy’s segments such as integrated retail, gas products and financial services all saw higher operating profit.

Massy’s total assets declined by two per cent TT $12.84 billion while its equity attributable to shareholders rose by 10 per cent to TT $6.37 billion. Cashflow from operations decreased by 16 per cent to TT $227.33 million with cash closing the period at TT $1.76 billion. Total liabilities declined slightly to TT $6.31 billion.

DESPITE what has normally been a slow period for the company, now worsened by challenges of the novel coronavirus pandemic, Stationery and Office Supplies (SOS) Limited, during its second-quarter period, registered $3.1 million in profits. This represents a 114 per cent increase up from the $22 million in losses recorded for the same period last year.

Profits for the six-month period stood at $58.4 million — 170 per cent more than the $21.8 million earned for the same period in June 2020.

“These are good indicators that Jamaica’s economy is continuing to rebound and as we progress through the summer months we will see the return of children to school, which will also help improve the sales of SEEK back-to-school products in the market.

“SOS has been able to adjust to the ever-changing marketplace, and this is a big reason why we have been able to continue to be profitable in an unpredictable economy,” the company stated in its latest unaudited results posted to the Jamaica Stock Exchange.

The company, which recently halted the production of exercise books due to a reduction in sales following the switch from classroom to online learning as a result of the pandemic, said it would resume production ahead of the back-to-school period. The company, however, said it would in the interim seek to produce more ruled pads and stenographer pads under its SEEK brand which it would use to target corporate clients, alot of whom are currently engaged in work-from-home arrangements.

The company operated by the McDaniel Family is a main supplier of office stationery and supplies. However, since the pandemic the business has pivoted into the sale of home office furniture and has also re-entered the trade of heavy-duty racks, which it supplies mainly to clients in the food processing and hospitality sectors.

For the six-month period ended June 30 the company grew its revenues to $550.9 million — up 16.5 per cent over the corresponding quarter last year. Second-quarter revenues also increased to $238.4 million. Expenses for the six-month period, however, climbed to $232 million over the $208 million spent last year.

At the end of the June period, total assets for the company increased to $920.7 million up from the $889 in June 2020. Earnings per share at the end of the quarter was $0.23, an increase of $0.14 compared to $.09 for the quarter in 2020.