Maersk still on target despite tough operating environment

Maersk Group has held its forecast of a $4bn underlying profit for 2015, despite oil price turbulence and falling container rates affecting its businesses.

Group profit for the second quarter was $1bn, down from $2.3bn in Q2 2014; revenues also fell from $11.9bn to $10.5bn.

At APM Terminals profit for the quarter fell to $161m from $223m in Q2 2014. The main cause of the drop was falling revenues in markets dependent on oil, the weakening of some currencies against the US dollar and divestments in 2014.

Weighted for ownership interest, handled volumes were down 6% to 9.2m TEU, or 3.5% in real terms when two terminals sold in 2014 are factored out. The expectations for APM Terminals’ result in 2015 has fallen from below 2014’s $849m to “significantly below” the same figure.

Maersk Line reported a dip in profits as Asia-Europe box rates suffered from price competition, although the Group’s CEO, Nils Andersen believes this to be a temporary issue.

Maersk Drilling delivered a profit of $218m, up from $117m in the same quarter last year, despite three rigs being off-contract. Fleet growth, cost saving measures and a $29m gain on the sale of drilling interests in Venezuela boosted results.

The business unit’s forecast result for 2015 was revised up to significantly higher than 2014’s $471m as more rigs are in operation, contract coverage is strong and an efficiency programme begins to show results.

APM Shipping Services has also had its forecast revised up, on the back of a strong first half of the year for its businesses.

Maersk Supply Service reported a near-doubled profit of $64m as it booked a $31m gain on the sale of a vessel and $23m in cost savings. Revenues were down by $19m due to lower rates, lower utilisation and divestments.

Maersk Tankers’ Q2 2014 loss of $2m was reversed by a $35m profit in the second quarter. Revenue was down as the unit felt the loss of its VLCCs, but a strong product tanker market and 7% drop in vessel operating costs brought strong earnings.

Svitzer returned a profit of $32m, in line with last year, and improved its harbour towage margins despite strong competition and a weakened dry bulk market.

The group has embarked on a $1bn share buyback programme, which it intends to complete within 12 months.

“The turbulence in the oil price has had a negative influence in the oil and offshore markets and countries dependent on oil. This has changed the outlook for Maersk Oil, Maersk Drilling, APM Terminals and APM Shipping Services, where previously announced profit and growth targets will be replaced by plans adapting to the volatile environment,” said Andersen.



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