Restructured AP Moller - Maersk in the red in Q1

Following a major restructuring of its business AP Moller – Maersk was $220m in the red in Q1 for its continuing operations while discontinued operations racked up a healthy $2.98bn profit boosted by the sale of Maersk Oil.

The Maersk Group has moved to refocus its business on transport and logistics comprising containers, logistics, and ports and services. In the first quarter of 2018 it reported a 30% jump in revenues $9.3bn buoyed by the addition of Hamburg Sud, with revenues up 10% if the contribution of the German line was excluded.

However, at bottom line level the company reported a Q1 loss of $220m from continuing operations, and an underlying loss of $239m. Discontinued operations, comprising Maersk Oil, Maersk Drilling, Maersk Tankers and Maersk Supply Service reported a $2.98bn profit, but much of this was related to a $2.6bn accounting gain from the sale of Maersk Oil to Total.

While reclassifying its continued operations into four areas – ocean, logistics and services, terminals and towage, and manufacturing and others – to reflect a strategy of becoming a global integrator of container logistics, ocean or container shipping continued to account for 68% of total revenue or $6.81bn.

“EBITDA was $492m ($484m), negatively impacted by higher unit costs among others due to adverse developments in bunker price and foreign exchange rates as well as Hamburg Süd portfolio mix,” the company said.

Commenting on the results Maersk Group CEO Soren Skou said: “In the first quarter of 2018, we reported a 30% revenue growth and the integration of the business is well underway with a successful start to the Hamburg Süd integration and the closing of Maersk Oil transaction in March with an accounting gain of $2.6bn.

“At the same time, on the short-term performance, our result especially in the ocean related part of the business was unsatisfactory. In response to the current challenging market conditions we are implementing a number of short-term initiatives to improve profitability and we reiterate our guidance for 2018.”

Maersk is forecasting a full year underlying profit of above the $356m in 2017 and EBITDA in the range of $4bn – $5bn.