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Maersk reports on a "year of transformation"

Søren Skou, CEO of A.P. Moller - Maers Søren Skou, CEO of A.P. Moller - Maers

FEBRUARY 9, 2017 — A.P. Møller - Mærsk A/S reports that both its revenue and its underlying profit grew in 2017, which it calls "a year of transformation."

Underlying profit for continuing operations was $356 million, compared to a loss of $496 million in 2016. 

Although the news on underlying profit is good, the actual loss for the period was a whopping $1.1 billion.

Putting this in perspective, Berlingske Business columnist Jens Chr. Hansen, writes that, scrolling "through the 150-page-long 2017 accounts, the negative pages in the accounts overshadow the positive. However, I particularly confirm that Maersk is in a very strong financial position ... There are billions in the coffers... Thus, the creation of the 'new' Maersk should not be hampered by lack of capital."

Here's how Søren Skou, CEO of A.P. Moller - Maersk, sums up 2017:

"The past year was unusual for A.P. Moller - Maersk, characterized by a cyber-attack and operational challenges in a few hubs," says Skou. "We succeeded in growing the revenue by 13%, improving cash flow and increasing underlying profits from a low 2016 base. However, the financial result shows that significant improvements are still needed. On the other hand, when we look at the strategic business transformation progress throughout the year has indeed been satisfactory. We have taken the first steps towards the integration of our container shipping, ports and logistics businesses and our digital transformation is taking shape. At the same time, we have found new owners for part of the energy-related business units."

maerskhighlights

Highlights from 2017 include $14 billion worth of M&A transactions, including acquisition of Hamburg Süd agreement to sell Maersk Oil, sale of Maersk Tankers and Mercosul-the Brazilian container line-as well as the sale of the remaining 19% stake in Dansk Supermarked Group. Additionally, "structural solutions" for Maersk Drilling and Maersk Supply Service are expected before the end of 2018.

The acquisition of Hamburg Süd is an important part of the Maersk growth strategy. Together, the two carriers have around 19% global capacity market share, more than 4 million TEUs in container capacity, and an unmatched network of services. The Germany-based carrier will remain an independent brand, with only operational aspects merging with Maersk Line. Cost synergies from the merger are expected to be between $350-400 million by 2019.

"After a successful acquisition of Hamburg Süd, the integration is off to a good start, with both carriers growing volumes during the first months. A smooth integration of Hamburg Süd remains a top priority for 2018," says Skou.


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