NOVEMBER 9, 2012 — Despite taking a $267 million impairment hit on its tanker unit, A.P. Moller - Maersk has turned in what Group CEO Nils S. Andersen (left) terms "a good result" for the third quarter "considering the challenging economic environment."
"Thanks to our rate initiatives and cost reductions, Maersk Line is back in black figures year-to-date, and the high oil price supports a satisfactory result for Maersk Oil," says Mr. Andersen. "We are expanding our terminals network in Latin America, Russia and other growth markets and expect our strategic initiatives to support both our returns and earnings stability as we move forward."
The Group delivered a profit of $933 million ($371 million) and a return on invested capital (ROIC) of 8.3 percent (4.9 percent) for Q3. Cash flow from operating activities was $2.9 billion ($2.1 billion) and cash flow used for capital expenditure was $678 billion ($4.8 billion). The Group's equity ratio was 52.2 percent (51.9 percent) and net interest-bearing debt was $14.8 billion ($14.5 billion).
The third quarter result was better than expected, particularly in Maersk Line and Maersk Oil, while the result was negatively affected by vessel impairments of $267million on some of Maersk Tankers' crude and product tanker segments.
Maersk Line's profit for the period was $498 million (loss of $289 million) with an average rate increase of 5.7 percent to 3,022 $/FFE. Rates were higher on all main trades. Volumes were unchanged at 2.1m FFE. Head haul volume declined by 15 percent on the Asia – Europe trade. Average unit costs decreased by 6 percent due to decreased bunker consumption per FFE and network optimization. Maersk Line announced rate increases especially for reefer containers with impact from January 2013.
Maersk Oil's profit for the period was $243 million ($368 million). The result was negatively impacted by a 23 percent decline in share of production to 240,000 barrels of oil equivalent per day (312,000 boepd) a lower average oil price of $109 per barrel ($113 per barrel), as well as a change in the decommissioning relief tax in the U.K. Maersk Oil completed three exploration/appraisal wells (five wells) and exploration costs were $268 million ($336 million). The Caporolo discovery offshore Angola was announced.
"We continue to make progress and receive positive news, most recently from Chissonga in Angola, and we are confident that we will reach our production target of 400,000 barrels per day by 2020," says Mr. Andersen.