Maersk Annual Report 2012 [Shipping Line]
The Group delivered a profit of USD 4.0bn (USD 3.4bn), which was slightly higher than the latest announced outlook of around USD 3.7bn expressed on 9 November 2012. The return on invested capital (ROIC) was 8.8% (8.3%). Profit was positively affected by the settlement of an Algerian tax dispute in Q1 of USD 899m combined with improved volumes, rates and unit costs for Maersk Line. Profit was negatively affected by a decline in Maersk Oil’s share of production and impairment losses of net USD 405m of which USD 268m related to Maersk Tankers in Q3. Divestment gains were USD 636m (USD 890m) with the divestment of two FPSOs, Maersk LNG and Maersk Equipment Service as the largest transactions. Revenue decreased slightly to USD 59.0bn (USD 60.2bn).
Cash flow from operating activities was USD 7.6bn (USD 7.3bn) while cash flow used for capital expenditure was USD 6.3bn (USD 9.8bn) after netting sales proceeds amounting to USD 3.4bn (USD 1.7bn). The Group’s free cash flow was positive USD 1.3bn (negative USD 2.5bn).
Net interest-bearing debt increased by USD 339m to USD 15.7bn (USD 15.3bn). Total equity was USD 39.3bn (USD 36.2bn); positively affected by the profit of the year of USD 4.0bn. Dividend paid was USD 945m (USD 924m).
With an equity ratio of 52.9% (51.4%) and a liquidity buffer of USD 13.6bn (USD 11.3bn), the Group is well prepared and determined to execute on its long-term growth aspirations and seize market opportunities within its core businesses despite continued constraints in the financial markets.
Maersk Line made a profit of USD 461m (loss of USD 553m) and a ROIC of 2.4% (negative 3.1%). The result was positively affected by improved volumes, rates and unit costs. The average freight rates were 1.9% higher at 2,881 USD/FFE (2,828 USD/FFE) and volumes increased by 5% to 8.5m FFE (8.1m FFE). Bunker consumption per FFE was reduced by 11% and headquarters headcount was reduced significantly.
Maersk Line announced and implemented significant general rate increases on most trades backed by active capacity adjustments in the form of slow steaming, scrappings, idling and blanked sailings. The total fleet capacity increased by 4% to 2.6m TEU (2.5m TEU). The capacity growth in owned fleet was partly offset by redelivery of time charter vessels. Maersk Line maintained its market share for the full year. Cash flow from operating activities was USD 1.8bn (USD 899m) and cash flow used for capital expenditure was USD 3.6bn (USD 3.2bn).
Maersk Oil made a profit of USD 2.4bn (USD 2.1bn) and a ROIC of 36.6% (37.2%). The result was positively affected by the one-off tax income of USD 899m from the settlement of an Algerian tax dispute and a USD 91m gain from a partial divestment of interests in Brazil. This was partly offset by a 23% decline in the Group’s share of oil and gas production to 257,000 boepd (333,000 boepd), primarily due to a lower share of production in Qatar and Denmark.
Development of the portfolio included maturation of the significant projects Chissonga in Angola and Johan Sverdrup in Norway, and an agreement of further development of the Al Shaheen field in Qatar and start-up of Dunga Phase II production in Kazakhstan. Exploration expenses were USD 1.1bn (USD 1.1bn). Cash flow from operating activities was USD 3.9bn (USD 4.3bn) and cash flow used for capital expenditure was USD 2.0bn (USD 3.8bn).
APM Terminals made a profit of USD 723m (USD 648m) and ROIC was 13.6% (13.1%). The result was positively affected by pre-tax divestment gains of USD 123m (USD 28m). Number of containers handled increased by 6% to 35.4m TEU (33.5m TEU), ahead of the market growth of 4%, boosted by additions to the portfolio.
The main portfolio changes were the acquisition of a 37.5% co-controlling stake in Global Ports Investments PLC, Russia, as well as the take-over of operations in Gothenburg, Sweden. New terminal projects were secured in Lazaro Cardenas, Mexico, and in Ningbo, China. Cash flow from operating activities was USD 975m (USD 912m) and cash flow used for capital expenditure was USD 1.4bn (USD 688m).
Maersk Drilling made a profit of USD 359m (USD 488m) and ROIC was 8.3% (12.5%). The result was negatively impacted by delayed start-up and maintenance yard stays of two units.
During 2012, Maersk Drilling has entered into three new major contracts and has now secured contracts for five out of seven newbuildings to be delivered in 2013-2015. The revenue backlog increased to USD 7.0bn (USD 4.9bn), and the one-year forward coverage by the end of 2012 was 98% (98% at the end of 2011). Operational uptime averaged 92.1% (95.6%). Cash flow from operating activities was USD 651m (USD 825m) and cash flow used for capital expenditure was USD 589m (USD 600m).
Maersk Supply Service made a profit of USD 132m (USD 243m) and a ROIC of 6.1% (11.2%), negatively affected by general oversupply in most segments of the market, except in the emergency response and rescue segment.
Maersk Tankers made a loss of USD 312m (loss of USD 153m) and a negative ROIC of 8.3% (negative 4.3%). The result was negatively affected by a USD 268m impairment loss. Maersk Tankers divested the Small Northwest Europe segment and entered into an agreement to divest the Handygas segment. The Handygas transaction will take place in 2013. The divestments are equivalent to 14% of the fleet measured on invested capital.
Damco made a profit of USD 55m (USD 63m) and ROIC was 13.5% (24.4%). Damco significantly increased its service offerings within the airfreight market through the acquisition in 2011 of NTS International Transport Services in China. In October 2012, Damco acquired the freight forwarder Pacific Network Global Logistics, strengthening its position in Oceania.
SVITZER made a profit of USD 9m (USD 102m) after impairment of goodwill of USD 102m related to the Adsteam activities acquired in 2007. ROIC was 0.6% (6.4%).
Dansk Supermarked Group made a profit of DKK 1.3bn (DKK 5.4bn including gain from sale of Netto, UK) and a ROIC of 8.2% (35.1%). The Group opened 71 new stores and closed 55 stores of which 37 were Tøj & Sko stores.
Maersk FPSOs and Maersk LNG made a profit of USD 336m (USD 10m) and a ROIC of 33.9% (0.4%), positively affected by divestment gains of USD 245m.
SHARE PRICE AND DIVIDEND
During 2012, the Maersk B-share price increased by 12.3% to DKK 42,600. The dividend payout proposed by the Board of Directors is DKK 1,200 per share of DKK 1,000, representing a dividend yield of 2.8% based on the B-share closing price as of 31 December 2012.
Posted at 22:24