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Maersk Falls into the Red

Maritime Activity Reports, Inc.

February 11, 2016

 Maersk Line posted a steep decline in profit last year to $1.3bn, well down from the 2014 result of $2.3bn and below its most recent forecast as freight rate declines accelerated in the latter stages of 2015.

The net profit of Maersk Group in 2015 amounted to 0.925 billion USD, representing a decrease of 84% yoy. The company revenues decreased with 16% yoy to 40.3 billion USD. The profit decrease appears in almost all sectors of the company, but the worst for 2015 definitely was the oil and offshore. 
"After a satisfactory result in the first half of the year with a ROIC of 10.2%, Maersk Group was severely impacted by a widening supply-demand gap across most of our businesses, leading to significant oil price and freight rate reductions," says a statement from the company.
ROIC for the second half of the year was negative 6.3%, impacted by impairments of USD 2.5bn after tax in Maersk Oil and for Q4 there was an underlying loss of USD 9m (profit of USD 1.0bn).
The net profit of the shipping line Maersk Line in the group structure decreased with 43% of 1.3 billion USD, mostly due to weak market conditions and low freight rates. 
“We are satisfied with the good operational performance across our businesses in 2015. Despite the very challenging market conditions in our industries, all business units delivered positive underlying profits and the Maersk Group achieved an underlying result of USD 3.1bn," says Group CEO Nils S. Andersen.
Given our expectation that the oil price will remain at a low level for a longer period, we have impaired the value of a number of Maersk Oil’s assets by USD 2.6bn after tax. We will continue to strengthen the Group’s position through strong operational performance and growth investments,” he added.
Meanwhile, there was a robust performance from APM Terminals, which delivered a net profit to the group of $626m, compared with $849m in 2014, despite a throughput decline of 5.9% to 36m teu – mainly the result of lower import volumes into West Africa, Russia and Brazil.
But perhaps the most pleasing result, said Mr Anderson, was from forwarder Damco, which, following a painful restructure, achieved a profit of $15m last year, following two years of losses.

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