2014 another tough year for Damco
AP Moller-Maersk’s freight forwarding arm Damco saw another tough year with losses deepening and revenues declining as the company continues to restructure and roll out new IT systems.
April 1, 2015
AP Moller-Maersk’s freight forwarding arm Damco saw another tough year with losses deepening and revenues declining as the company continues to restructure and roll out new IT systems. The forwarder recorded a loss of US$293 million for 2014, against a 2013 loss of $111 million, while revenues declined 1.5 per cent to $3.2 billion. The company suffered a fourth quarter loss of $183 million.
The revenue and profit decline came on the back of a 16 per cent year-onyear decline in airfreight volumes, a six per cent decline in seafreight volumes, but saw some relief with supply chain management volumes climbing by 11 per cent.
AP Moller-Maersk said results were impacted by impairment losses of $68 million, compared with $6 million in 2013, reduced profitability in air and ocean and an unsatisfactory overhead cost level.
It said increased visibility from its new system roll-outs revealed exposures in certain geographies and product categories. Damco made several adjustments to correct these exposures that had a negative impact on performance.
It added that restructuring activities and the roll-out of its new operating platform had proven more complex than originally anticipated, generating delays in gaining the planned productivity improvements. “The restructuring initiatives are expected to strengthen commercial competitiveness and get Damco back to profitable growth in 2015.”