Maersk Group Bleeds Red Ink in Q2

Maersk Group CEO Søren Skou; Image Courtesy: Maersk

Danish energy and transportation giant A.P. Moller – Maersk sailed into a loss of USD 264 million in the second quarter of 2017, a switch from last year’s profit of USD 118 million.

Maersk said the loss was due to impairments worth USD 732 million, primarily resulting from lower asset valuations in Maersk Tankers and some financially-troubled terminals in APM Terminals.

The group booked a revenue jump of USD 743 million to USD 9.6 billion, driven by USD 1.0 billion or 21% increase in its boxship business Maersk Line, which returned to profit of USD 339 million. The revenue rise was also aided by an increase of USD 90 million in Maersk Oil, partly offset by a USD 217-million drop in Maersk Drilling and USD 75-million fall in APM Terminals.

Operating expenses were up by USD 456 million standing at USD 7.5 billion amid 61% higher bunker prices reaching USD 545 million in Maersk Line and 1.7% rise in volumes.

Cash flow from operating activities climbed to USD 1.4 billion (USD 940 million) primarily due to higher earnings, the group said.

“With an equity ratio of 52.8% (52.5% at 31 December 2016) and a liquidity reserve of USD 11.3 billion (USD 11.8 billion at 31 December 2016), A.P. Moller – Maersk maintains its strong financial position,” Maersk added.

In its outlook for 2017, the company said it expects to book an underlying profit above USD 711 million from 2016, despite the negative impact from the June cyber-attack.

The guidance for 2017 excludes the acquisition of Hamburg Süd.

Financial highlights: 

  • Maersk Line returned to profit of USD 339 million
  • APM Terminals reported a loss of USD 100 million, against a profit of USD 112 million amid USD 250-million worth of impairments.
  • Damco reported a break-even result of USD 0m (profit of USD 10 million)
  • Svitzer reported a profit of USD 19 million (USD 24 million) negatively impacted by an impairment of USD 12m on 11 idle vessels marketed for sale and by an impairment of USD 6 million on investment in Ardent
  • Maersk Oil reported a profit of USD 191 million (USD 131 million)
  • Maersk Drilling reported a profit of USD 28 million (USD 164 million)
  • Maersk Supply Service reported a loss of USD 10 million (loss of USD 106 million)
  • Maersk Tankers reported a loss of USD 483 million

 

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