Maersk delivers profit of USD ۴۲۶m in ۲۰۱۶ third quarter

TIN news:   The Maersk Group has continued to be significantly impacted by market imbalances, leading to sustained low container freight rates and a low oil price environment. The Group has announced a new strategic direction and Group structure and furthermore continues to focus on cost efficiency as well as maximising synergies between its business units to improve operational performance.
Specifically, the Group delivered a profit of USD 438m (USD 778m) negatively impacted by lower container freight rates partly offset by positive impact of termination fees in Maersk Drilling. The return on invested capital (ROIC) was 4.9% (7.6%). The free cash flow was USD 736m (USD 904m).
The underlying profit for the Group of USD 426m (USD 662m) was significantly lower than for same period last year, predomi nantly driven by a loss in Maersk Line and with lower underlying results in APM Shipping Services and APM Terminals. Maersk Drilling and Maersk Oil recorded increased underlying profits. The Group’s revenue decreased by USD 933m or 9.2% compared to Q3 2015, predominantly related to Maersk Line with a decrease of USD 659m due to 16% lower average container freight rates, Maersk Oil with a decrease of USD 95m due to 8.0% lower oil prices and decreased rates in Damco and Maersk Tankers. This was partly offset by 11% higher container volumes in Maersk Line and 7.0% higher volumes in APM Terminals. Operating expenses decreased by USD 573m or 7.3% mainly due to lower bunker prices and cost saving initiatives. The Group’s cash flow from operating activities was USD 1.7bn (USD 2.2bn). Net cash flow used for capital expenditure was USD 935m (USD 1.3bn) with investments predominantly.
“The Maersk Group delivered an underlying profit of USD 426m in the third quarter of 2016. The result is unsatisfactory, but driven by low prices. We generally perform strongly on cost and volume across businesses. Maersk Line for the second quarter in a row reported a loss due to continued low freight rates, down 16% y-o-y. Freight rates were however up 5.5% q-o-q, for the first time since Q3 2014. Maersk Line performed strongly on volume and unit cost. APM Terminals delivered a result below last year, as we continued to be challenged by low volume growth on a like–for-like basis. For the second quarter in a row Maersk Oil delivered a positive result driven by strong cost performance and production efficiency. Also Maersk Drilling delivered strong profits, driven by termination fees and good cost performance. The implementation of the new strategic direction and the restructuring of the Group is progressing, and we look forward to sharing further details at the Capital Markets Day on 13th of December,” says Maersk Group CEO Søren Skou.