The Maersk Group has delivered a profit of USD 118m (USD 1.1bn) and an underlying profit of USD 134m (USD 1.1bn) for the second-quarter of 2016.
In response to challenging supply-demand imbalances, the Group said continues to execute on factors that are within its control by reducing cost and delivering high operational performance.
The Group delivered a profit of USD 118m (USD 1.1bn) negatively impacted by the average container freight rates and oil price. The return on invested capital (ROIC) was 2.0% (10.2%).
The underlying profit for the Group of USD 134m (USD 1.1bn) was significantly lower than for the same period last year for all businesses except Damco.
“In a second-quarter impacted by low growth and falling prices in nearly all our markets, the Maersk Group delivered an underlying profit of USD 134m. The result is unsatisfactory. Cost reductions and operational optimisations, however, made a significant contribution to mitigating the impact of the negative market conditions. Maersk Oil has reduced operational costs by 25 percent, upholding a break-even at USD 40-45 per barrel,” said Maersk Group CEO Søren Skou.
“The costs in Maersk Line have been reduced to an all-time low level and are under USD 2,000/FFE for the first time. Our financial position remains strong with a liquidity reserve of USD 11.5bn. The Group’s expectation for 2016 of an underlying result significantly below last year is unchanged. To ensure the future strength, profitability and development of new growth opportunities of the company, the Board of Directors have initiated a strategic review of the company and will report on progress of the review before the end of Q3, 2016,” Søren Skou added.
Highlights:
• In a second-quarter impacted by low growth and falling prices in nearly all our markets, the Maersk Group delivered an underlying profit of USD 134m.
• Cost reductions and operational optimizations made a significant contribution to mitigating the impact of the negative market conditions.
• The Group’s expectation for an underlying result for 2016 is unchanged significant below last year (USD 3.1bn).
• Maersk Line delivered an underlying loss of USD 139m, despite costs being reduced to all time low level of under USD 2,000/FFE. Expectation for 2016 maintained.
• Maersk Oil achieved an underlying result of USD 130m and a ROIC of 12.1% and expects a small positive underlying result for 2016.
• Progress on the initiated strategic review of the Group will be communicated before end of Q3, 2016.
Source:ClassFMonline
