Q2: APM Terminals delivers $179m profit, 12.8% ROIC
• Fejfer warns: ‘No room for complacency’
The result was United States Dollars (USD) 179 million (USD 19 million improvement over the corresponding period of 2012), and the return on invested capital reached 12.8 per cent.
Chief Executive Officer of AP Moller-Maersk Nils S. Andersen told participants at press conference last week that the improved result has been achieved despite weak market conditions in mature markets.
He also highlighted that APM Terminals is well under way towards the 1billion USD profit target to be met in 2016.
“APM Terminals continues to deliver really well operationally and has also been helped by the investments over the last years in growth markets. Focus now is on getting new terminals in growth markets ready for operation,” said Andersen.
APM Terminals Chief Executive Officer Kim Fejfer describes the second quoter performance as “approved” when it comes to external expectations, but with good reason to maintain a very self-critical look internally.
“We are at the same time facing slower market growth, changing ways of our customers and aggressive competition for growth opportunities. Let’s also remind ourselves that a majority of our result can be attributed to a minority of high performing terminals. So there is no room for complacency,” Fejfer said.
According to Fejfer, APM Terminals can count the following as positives in the second quarter:
• Our teams in Africa keep on delivering impressive results.
• We are maintaining the strategic goal of minimum 50 per cent of volumes coming from 3rd party customers.
• We have been commercially successful in closing several important deals.
• The Monrovia reconstruction has been completed on time and on budget.
• We have steered clear of labor disruptions in Q2.
The following must be counted on the critical side:
• We had 1 fatality under our operational control and 3 fatalities outside our operational control.
• We had zero volume growth, and most terminals in Europe and North America suffer decreased volumes.
• Even the traditional high growth markets seem to be slowing.
• Despite Santos having started operations this week, we still have had a substantial delay here.
• We still struggle with resolving major hotspot issues around eg. TAMP in India and Cai Mep in Vietnam.
Fejfer points to the adjustment of the organizational structure – with effect from July 1- as a key element in facing the changing business environment with sluggish markets and overcapacity in key mature markets.
“This plan will help us adapt to the changing business environment, enhance focus and accelerate functional excellence,” Fejfer said.
He added: “We now have less than five months left of 2013, so it is crucial that everybody focuses on delivering on their targets.”