Maersk CEO discusses company's record 5 billion dollar profit (3)

20:25, February 25, 2011      

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Andersen acknowledged the benefit of "very good shipping rates" in 2010, but said Maersk tries to balance fluctuations in the container shipping industry by keeping debt low, and staying competitive.

"If you take the group as a whole, we are working on having a very strong balance sheet and a low level of gearing, so we don't have too much debt, which makes us solid and able to absorb the changes," he said.

Gearing is the ratio of a company's debt to its equity. Low gearing means less reliance on borrowing for growth and consequently, lower risk for shareholders.

"In addition, we are focused on being competitive. We know that if we go into a situation where our figures look bad, then the competitors should look even worse," Andersen said.

Moreover, it is likely that Maersk's diverse portfolio allows earnings in one sector to off-set losses in another. The conglomerate holds portfolios in oil and gas extraction, tanker ships, drilling rigs, port terminals and even retail supermarkets. Its earnings on oil and gas can, for instance, help offset potential revenue loss from the more volatile container shipping sector.

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