Maersk Group’s Full-Year Profit Down 82 Pct

Danish shipping and energy conglomerate Maersk Group delivered a profit of USD 925m for the full year ending December 31st 2015, against USD 5.2bn reported in 2014, a drop of 82%.

Maersk’s underlying profit for full year reached USD 3.1bn, also down from 2014 results when Maersk reported USD 4.5bn in underlying profit.

Compared to last year, profits were lower in Maersk Line, Maersk Oil and APM Terminals and higher in Maersk Drilling and APM Shipping Services.

After a satisfactory result in the first half of the year with a ROIC of 10.2%, Maersk Group was severely impacted by a widening supply-demand gap across most of its businesses, leading to significant oil price and freight rate reductions. ROIC for the second half of the year was negative 6.3%, impacted by impairments of USD 2.5bn after tax in Maersk Oil and for Q4 there was an underlying loss of USD 9m (profit of USD 1.0bn).

The group said that it delivered a strong cash flow from operating activities of USD 8.0bn (USD 8.8bn) for the year and USD 2.0bn (USD 2.4bn) in Q4, despite a significant decline in container freight rates and oil prices.

“We are satisfied with the good operational performance across our businesses in 2015. Despite the very challenging market conditions in our industries, all business units delivered positive underlying profits and the Maersk Group achieved an underlying result of USD 3.1bn. Given our expectation that the oil price will remain at a low level for a longer period, we have impaired the value of a number of Maersk Oil’s assets by USD 2.6bn after tax. We will continue to strengthen the group’s position through strong operational performance and growth investments,” says Group CEO Nils S. Andersen.

Maersk Line made a profit of USD 1.3bn (USD 2.3bn) and a ROIC of 6.5% (11.6%) due to poor market conditions, leading to significantly lower freight rates, in particular in the second half of the year.

Results across the group were as follows:

  • APM Terminals made a profit of USD 654m (USD 900m), Maersk Drilling made a profit of USD 751m (USD 478m), Maersk Oil made a loss of USD 2.1bn (loss of USD 861m) andAPM Shipping Services made a profit of USD 446m (loss of USD 230m) .

The Maersk Group expects an underlying result significantly below last year’s USD 3.1bn across its branches. Gross cash flow used for capital expenditure is expected to be around USD 7bn in 2016 .

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