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A.P. Møller-Mærsk Posts FY Profit; Maersk Drilling To Go Public April 4

A.P. Møller-Mærsk A/S (AMKAF.PK,AMKBF.PK) reported that its net profit for fiscal year 2018 was US$3.2 billion, compared to a loss US$1.2 billion last year. The latest year result was positively impacted by an accounting gain of US$2.6 billion from the closing of the Maersk Oil transaction in 2018 and an impairment in Maersk Drilling of US$1.75 billion in 2017.

The result for the continuing operations was a loss of US$148 million compared to a loss of US$194 million in the previous year.

EBITDA was US$3.8 billion, compared to US$3.5 billion in the prior year.

Annual revenue grew 26% to US$39.0 billion from US$30.9 billion in the prior year,, with growth in all segments. Non-Ocean revenue amounted to 32% (35%) of total revenue. The lower share of non-Ocean revenue was driven by the acquisition of Hamburg Süd contributing to Ocean revenue.

The underlying profit for continuing operations after financial items and tax was US$220 million, compared to US$356 million last year.

For 2019, A.P. Moller - Maersk expects earnings before interest, tax, depreciation and amortization or EBITDA of around US$5.0 billion when including the effects from IFRS 16, and around US$4.0 billion when excluding the effects from IFRS 16. From the first-quarter of 2019, guidance for EBITDA will be based on IFRS 16.

The organic volume growth in Ocean is expected to be in line with the estimated average market Guidance for 2019 growth of 1-3% for 2019. Guidance on gross capital expenditure or CAPEX is around US$2.2 billion and a high cash conversion (cash flow from operations compared with EBITDA).

The A.P. Møller - Mærsk A/S Board of Directors has decided to initiate the separation of A.P. Moller - Maersk's drilling activities through a demerger of A.P. Moller - Maersk. The shares in Maersk Drilling Holding A/S and its subsidiaries as well as certain other assets and liabilities will be con-tributed to a new company with the legal name 'The Drilling Company of 1972 A/S' and the shares hereof will be admitted for trading and official listing on Nasdaq Copenhagen A/S. The new company will be referred to as Maersk Drilling.

Following the anticipated signing and publication of statutory demerger documents on 4 March 2019, the Board of Directors of A.P. Moller - Maersk intends to propose the demerger for approval by the shareholders at the A.P. Moller - Maersk Annual General Meeting on 2 April 2019.

Subject to such approval of the demerger, the shares in Maersk Drilling will be distributed to A.P. Moller - Maersk shareholders, who in addition to their shareholding in A.P. Moller - Maersk will become shareholders in Maersk Drilling. The anticipated first day of trading on Nasdaq Copenha-gen is on 4 April 2019.

The A.P. Moller - Maersk Board of Directors intends to propose a single share class structure for Maersk Drilling with the newly listed shares in Maersk Drilling being distributed to the A.P. Moller - Maersk shareholders on a pro-rata basis based on the nominal value of the shares in A.P. Moller - Maersk. Shareholders will receive one share in Maersk Drilling per nominal A.P. Moller - Maersk DKK 500 share and two shares in Maersk Drilling per nominal A.P. Moller - Maersk DKK 1,000 share.

A.P. Møller Holding A/S has agreed to a 360-days lockup of their shareholding in Maersk Drilling, subject to certain customary exemptions.

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