Maersk Third Quarter Profit Below Expectations
A.P. Moller-Maersk missed forecasts with a 44 percent fall in third-quarter profit on Wednesday as the world's biggest container shipping firm struggles with sector overcapacity.
Net profit fell to $438 million for the three months to September 30, below the $490 million expected by analysts.
It maintained its guidance for the year, calling for an underlying result significantly below last year's $3.1 billion.
“The result is unsatisfactory, but driven by low prices,” says Maersk Group CEO Søren Skou. “We generally perform strongly on cost and volume across businesses.”
Maersk Line for the second quarter in a row reported a loss due to continued low freight rates, down 16 percent year-on-year. Freight rates were however up 5.5 percent quarter-on-quarter, for the first time since the third quarter 2014. Maersk Line performed strongly on volume and unit cost.
APM Terminals delivered a result below last year, as it continues to be challenged by low volume growth on a like-for-like basis.
For the second quarter in a row Maersk Oil delivered a positive result driven by strong cost performance and production efficiency. Also Maersk Drilling delivered strong profits, driven by termination fees and good cost performance.
“The implementation of the new strategic direction and the restructuring of the Group is progressing, and we look forward to sharing further details at the Capital Markets Day on 13th of December,” said Skou.
In September Maersk said it would concentrate on the further development of its shipping business and split off its Maersk Oil and related businesses such as Maersk Drilling and Maersk Tankers.
Maersk is fighting to remain the world's leading container shipping carrier amid a wave of mergers and acquisitions, including deals involving China's COSCO, France's CMA CGM and Germany's Hapag-Lloyd as well as the bankruptcy of Korea's Hanjin Shipping Co Ltd.
In the latest move, Japan's top three shipping firms Kawasaki Kisen, Mitsui O.S.K. Lines and Nippon Yusen said on Monday they planned to combine their container shipping operations in a joint venture that will have $19 billion in combined revenues and control 7 percent of global container capacity.
"We grew more than the market and gained some market share in the third quarter," said Skou, adding that following Hanjin Shipping's bankruptcy, Maersk managed to grab a higher share of their volumes than rivals did.