AP Moeller-Maersk has raised the earnings forecast for its container line, which almost doubled profit as lower fuel prices and costs offset falling freight rates.

Maersk Line will report a profit this year “significantly above” that of 2012, compared with a previous forecast of earnings “above” last year’s level, the Copenhagen-based company said in a statement today.

The world’s largest container line posted second-quarter net income of $439 million (€329 million), compared with $227 million a year earlier.

“Maersk Line revises its expected result on continued strong cost performance and the stronger result for the first half of 2013 compared to last year,” the company said.

The improvement was driven by lower costs mainly from “vessel network efficiencies” aided by reduced bunker prices. Maersk Line has trimmed its fleet and slowed sailing speeds to curb capacity as falling consumer demand hurts cargo volume and carriage prices.

“AP Moeller-Maersk reported much better results than we expected and also higher than consensus,” Frode Moerkedal, an analyst at RS Platou Markets in Oslo, said in a note to clients today. “The beat is driven by Maersk Line, which surprised by very good volumes and lower-than-expected bunker costs. On the negative side, Maersk Oil disappointed with very weak production.”

AP Moeller-Maersk, Maersk Line’s parent, reported a profit of 4.48 billion kroner (€600 million) in the second quarter, compared with 5.26 billion kroner a year earlier. It now expects a profit excluding impairment losses and divestment gains of 3.5 billion kroner in 2013, compared with a previous forecast of 2.9 billion kroner.

Net income for the period beat the average analyst estimate in a survey compiled by Bloomberg of 3.24 billion kroner.

The decline reflects a 48 percent drop in earnings to 1.43 billion kroner at Maersk Oil. The performance of the company’s most profitable division was affected by lower average oil prices and the unit now expects a 2013 result that is “significantly below” last year’s level.

Maersk Line cut unit costs 12.7 per cent in the quarter as bunker costs slumped 31 per cent because of lower consumption and fuel-price declines.

The average freight rate per forty-foot equivalent unit stood at $2,618 in the second quarter, compared with $3,014 in the same period a year earlier. That hurt revenue which declined 9.2 per cent to $6.7 billion in the quarter, even as volume rose 2.1 per cent.

Maersk Line today revised its forecast for global demand growth for seaborne containers, saying it now expects a rise of 2 to 3 per cent in 2013, compared with a previous forecast of 2 to 4 per cent growth.

“The outlook for container transportation remains challenging as demand is expected to continue to be weak in 2013 while new deliveries are expected to amount to 9.5 percent of the fleet,” Maersk said. “Accordingly, Maersk Line will maintain focus on supply management such as idling of vessels and blank sailings.”(Bloomberg)