APM Terminals Takes a Hit in Q3

Maersk’s terminal operating company, APM Terminals delivered a profit of USD 175m in the third quarter of 2015, substantially down from USD 345m reported in the same period last year.

The company’s return on invested capital (ROIC) was 11.6%, down from 22.5% in 2014, and the underlying profit was USD 175m, also lower when compared to USD 201m reported in the corresponding period last year.

“The low oil price resulted in a sharp decline in import volumes into oil producing countries in West Africa, Russia and Brazil. Along with the appreciating USD and divestments in 2014, this caused revenue to decrease by 5.7% and the EBITDA-margin to decrease by 2.1% compared to same quarter last year,” the company’s business report for the quarter shows.

The number of containers handled by APM Terminals decreased by 8.7% compared to 2014, reaching 8.9m TEU (9.7m TEU).

AMP Terminals attributed this partly to the divestments of APM Terminals facilities in Virginia, Charleston, Jacksonville and Houston, USA and Terminal Porte Océane S.A. Le Havre, France, which also affected the results for the full nine months of the year.

Excluding these, like-for-like volumes decreased by 4.4% whereas the overall global container market grew approximately by 1.8% in Q3.

The company said that the acquisition of the TCB portfolio will have a negative impact on ROIC of approximately 1%-point due to the increased asset base and the amortisation of terminal rights.

The acquisition has an implied enterprise value of USD 1.1bn with capex investments of USD 400m over the next five years. Subject to regulatory approvals the deal is expected to close in Q1 2016.

Revenue improvement and cost savings initiatives taken by the terminal operator across its global portfolio have delivered improvements in both revenue increase and cost savings of approximately USD 50m in Q3 2015 to the bottom line; “however the impact from the adverse market conditions was only partly mitigated”.

For the nine months of 2015, APM Terminals made a profit of USD 526m, a decline from USD 783m reported in the same period last year.

Volumes decreased by 6% compared to 2014, reaching 27.2m TEU (28.9m TEU).

APM Terminals maintains the expectation for the underlying result to be significantly below 2014 (USD 849m) due to continued weak business climate in oil dependent markets.

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