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A.P. Moller-Maersk Q2 Profit Declines, But Sees Higher Net Result For Full Year

Danish container shipping firm A.P. Moller-Maersk A/S (AMKBF.PK,AMKAF.PK) Friday reported a decline in second-quarter profit, reflecting 9 percent fall in revenues as well as Very Large Crude Carriers, or VLCC impairments. For full-year 2013, the company expects a lower result, but excluding impairment losses and divestment gains, net result is currently expected to be up from the prior year.

The company earlier projected full-year net result to be in line with 2012. The shares are trading up about 5 percent in Copenhagen.

The firm said it achieved higher profit across all businesses, except Maersk Oil and Damco as well as Maersk Tankers. Maersk Tankers posted a loss of $274 million, sharply wider than $9 million in the preceding year, mainly due to VLCC impairments of $230 million and provisions for onerous contracts of $50 million.

The company experienced significant improvements in Maersk Line and Maersk Drilling, whereas Maersk Oil's profit was reduced due to declining entitlement production and lower oil price.

In the second quarter, the company's profit declined 13 percent to 4.89 billion Danish kroner from 5.60 billion kroner in the previous year. On a U.S. currency basis, the Group recorded a profit of $856 million.

A.P. Moller-Maersk A/S share of profit was 4.48 billion kroner, down from 5.26 billion kroner a year ago. Profit before tax was 8.96 billion kroner, down 28 percent from last year.

Maersk Line, which transports cargo, reported a profit of $439 million, higher than $227 million a year ago that reflected lower costs. Volumes increased 2.1 percent, while average freight rate decreased 13.1 percent.

Maersk Oil profit declined to $249 million from $468 million in the prior year due to lower average oil price and a decrease in entitlement production. Damco reported a loss of $8 million, compared to a profit of $28 million.

Group quarterly revenues fell 9 percent to 80.94 billion kroner from 88.91 billion kroner a year earlier.

In Dollar terms, Group revenue slid 8 percent year-over-year to $14.2 billion, hurt by lower average container freight rates and lower oil entitlement production, partly offset by higher container volumes.

Looking ahead, for full-year 2013, the firm expects a result around $3.3 billion, lower than $4.0 billion reported in 2012. Excluding impairment losses and divestment gains, the net result is currently projected to be about $3.5 billion, while in the prior year, the company posted $2.9 billion.

In Copenhagen, the shares are currently trading at 47120 kroner, up 5.27 percent.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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