Falling freight rates hit Maersk Group profits

Maersk Group CEO Nils S. Andersen Maersk Group CEO Nils S. Andersen

NOVEMBER 6, 2015 — Two days after Maersk Line's announcement of job cuts, shipbuilding postponements and service closures, parent A.P. Møller - Mærsk A/S today published a third quarter report that, as expected, told a story of tough market conditions and reduced profits.

The Maersk Group delivered a profit of $778 million (compared with $1.5 billion in the third quarter of last year) negatively impacted by the lower oil price and lower average container freight rates, down 51% and 19% respectively compared to the same period last year. The return on invested capital (ROIC) was 7.6% (12.7%).

The underlying profit was $662 million ($1.3 billion) with lower profits in Maersk Line, Maersk Oil and APM Terminals and improved result for Maersk Drilling, while APM Shipping Services was on par with Q3 last year.
Group CEO Nils S. Andersen said the decline of nearly 50 percent  in underlying profit compared to last year was primarily due to container freight rates deteriorating to a historically low level, especially in the later part of Q3, and profits in Maersk Oil being impacted by the lower oil price.

"The expected underlying result of around $3.4 billion for 2015 reflects good performance in very challenging oil and container shipping markets, where the continuous actions taken in all our business units to reduce the cost base will enable us to maintain our ability to pursue the opportunities arising in our industries," says Mr. Andersen.

MORE

Want more? Subscribe now!

News from NASDAQ