Danish shipping company Maersk Line, owned by the McKinney-Moeller family, is to buy back $1 billion (€750 million) in shares - the first buyback scheme in its 110-year history.
The world’s largest shipping company said this week it would complete the buy back over the next 12 months, with the possibility of buying more shares in future.
According to Jacob Pedersen, senior analyst at Sydbank, the buyback scheme is unlikely to have any impact on the family’s ownership stake because shares are being bought from the free market by the board.
“Part of the motive is to avoid piling up excess cash in the business,” the Danish analyst said. “I do not suspect that the family had much say in the deal and do not stand to benefit in financial terms.”
The McKinney-Moeller family, which owns 51.09% of the container shipping division through parent company AP Moeller-Maersk, ships 15% of the world’s containers through Maersk Line.
According to this week’s statement, Maersk Line posted a $547 million profit for the second quarter, compared with $439 million the previous year. Shares jumped 5% following the news.
“If you look at other container lines Maersk Line is really hitting it out of the park,” Pedersen said. “Almost all of the other container liners are deep in the red and have been for the last 2 to 3 years. In the second quarter they even managed to return 10% on investor capital.”
Following a net loss of $1 billion in 2009, Maersk Line invested in larger ships that could both carry more cargo and save on fuel consumption, as part of a decade-long modernisation process.
As a result, Maersk’s fuel usage dropped 2.8% on the previous year, amounting to savings of $1.3 billion, but the company shipped 6.6% more volume overall.
The Danish shipping line also made significant steps to streamline their shipping network, Pederson said, which helped the firm to capture a significant proportion of the market from competitors.
Controlled by the McKinney-Moeller family through a foundation, Maersk traces its roots to 1904 when it was set up by Arnold Peter Moeller.