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Maersk to cut US$500 million costs, says CEO

Maersk to cut US$500 million costs, says CEO

A.P. Moeller-Maersk A/S will cut another US$500 million in costs this year after the owner of the world's biggest container line posted its first loss since at least World War II.
"We're not cutting just to survive but to become more competitive," Chief Executive Officer Nils Smedegaard Andersen said in the Copenhagen-based company's employee news letter distributed via e-mail today. "I hope we will be able to make an interesting acquisition or buy some distressed assets."
The shipping market contracted in 2009 for the first time since containerization became globalized in the 1970s, while capacity grew as new ships, ordered during boom years, came into service. The additional cuts will raise to US$2.5 billion the total amount of spending reductions that Maersk has made to right itself after posting a US$1.29 billion net loss in 2009.
"We got as much out of 2009 as possible under the circumstances," Andersen said according to Maersk Post. "I'm confident that we're in a strong position to take our share in even a modest upturn in 2010, so I'm cautiously optimistic."
The container line will have "reasonable result" in 2010 because it has the potential to book "a far better profit" per transported container than its competitors, Andersen said.
Maersk said it may sell some of its less profitable business units as part of the cuts. The company, Denmark's biggest, has said it will favor acquisitions for its oil and gas exploration division and its port operator unit.
Maersk will have to go "for the fruits that hang higher" and for "smaller items and areas" to find cost cuts this year, Andersen said.