---

Maersk Line reports that it spent $700 million less on bunker fuel in 2016 compared to the previous year.

The Danish shipping giant's total annual spend on marine fuels declined by 25 percent to $2.1 billion last year, down from $2.8 billion in 2015.

The average price spent on bunkers by Maersk Line in 2016 was $223 per tonne - a drop of $92, or 29.2 percent, on the $315-per-tonne figure recorded the previous year. A breakdown of Maersk Line's average fuel price since 2012 has been provided below.

Average fuel price ($ per metric tonne)

Year	Price($/mt)	+/-($)	+/-(%)
2016	223	-92	-29.2
2015	315	-247	-44.0
2014	562	-33	-5.5
2013	595	-66	-10.0
2012	661	--	--

Maersk Line noted that its bunker efficiency improved by 2.2 percent to 910 kg/FFE in 2016, compared to 931 kg/FFE the previous year.

"The cost initiatives announced in Q4 2015 progressed in line with expectations," the container operator explained.

Maersk Line added that it delivered a record low unit cost at both floating and fixed bunker price. The unit cost at floating bunker was 1,982 $/FFE, or 13 percent lower than in 2015 (2,288 $/FFE), while the unit cost at fixed bunker was 10 percent below 2015. The unit cost was said to have benefited from improved fleet utilisation and cost efficiencies while unit cost at floating bunker benefited from a 29 percent decrease in bunker price.

Meanwhile, total bunker costs for A.P. Moller - Maersk Group were $2.1567 billion in 2016 compared to $2.987 billion in 2015.

Overall results in 2016

In its financial results for the year, Maersk Line recorded a loss of $376 million in 2016 compared to the previous year's profit of $1.3 billion. The underlying result was a loss of $384 million (2015: profit of $1.3 billion).

Maersk Line said that the loss was due to "poor market conditions leading to sustained lower freight rates partly offset by higher volumes and lower unit costs related to lower bunker price, higher utilisation and cost efficiencies".

A.P. Moller - Maersk Group recorded a loss of $1.9 billion in 2016 compared to the previous year's profit of $925 million. Revenue decreased to $35.5 billion (2015: $40.3bn) across all eight businesses. This was said to be predominantly due to lower average container freight rates and lower oil prices. Operating expenses decreased by $2.6 billion mainly due to lower bunker prices and focus on cost efficiency across all businesses, Maersk said.

Fourth-quarter figures

In the fourth quarter, Maersk Line's bunker expenses increased by 26 percent and the average bunker price paid rose by 11 percent.

Bunker efficiency deteriorated by 0.4 percent to 912 kg/FFE (909 kg/FFE). Unit cost at fixed bunker price was 10 percent lower than in the corresponding three-month period in 2015.

The unit cost at floating bunker of 1,973 $/FFE (2,160 $/FFE) was 8.7 percent (187 $/FFE) lower than the same period last year - driven by improved fleet utilisation and cost efficiencies, Maersk Line said.

In its financial results, Maersk Line reported a loss of $146 million in the fourth quarter compared to a profit of $182 million in 2015. Revenue increased 2.4 percent to $5.3 billion, up 0.1 billion year-on-year. Maersk Line said the development was driven by volumes increasing by 12 percent to 2,701k FFE (2,404k FFE), partly offset by freight rates falling by 7.1 percent to 1,804 $/FFE (1,941 USD/FFE).

Maersk Line noted that freight rates declined across all trades excluding Europe, mainly as a result of the imbalance between supply and demand built up in earlier periods.

Global container demand is estimated to have risen by around 4 percent in the fourth quarter of 2016. Maersk Line said the growth was primarily driven by solid demand on East-West and Intra-regional trades while container volumes on the North-South trades remain subdued.

Guidance for 2017

In its guidance for 2017, A.P. Moller - Maersk said that a $10-per-barrel change in the price of crude oil would result in the group's underlying result varying by $0.26 billion.

A $100 change in the price of bunker fuel would lead to the underlying result varying by $0.4 billion, A.P. Moller - Maersk noted.