A.P. Møller - Mærsk A/S begins 2018 with strong revenue growth however unsatisfactory earnings [Shipping Line]
In Q1 2018, A.P. Moller - Maersk had a revenue growth of 30% to USD 9.3bn, 10% excluding Hamburg Süd, with growth in all business segments and a strategic transformation well underway. A.P. Moller - Maersk reiterates its expectations for 2018 of an underlying profit above 2017 (USD 356m), however noting increased uncertainties due to geopolitical risks, trade tensions and other factors impacting freight rates, bunker prices and rate of exchange.
"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 USD 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," says Søren Skou, CEO of A.P. Moller - Maersk.
Reporting in new segments
A new financial reporting structure is implemented from Q1 2018 to support the strategic direction towards becoming the global integrator of container logistics. The four new business segments (Ocean, Logistics & Services, Terminals & Towage and Manufacturing & Others) are aligned with the strategic focus on growing the non-ocean part of the business disproportionally to the ocean.
Søren Skou, CEO of A.P. Moller - Maersk explains:
"The new format reflects that we are an integrated global container transport and logistics business focusing on our customers' value chains, and it allows us to follow our progress, particularly in those parts of the business which are not purely ocean freight, which we need to grow in order to minimise the cyclical part of our business."
A.P. Moller - Maersk increased its revenue to USD 9.3bn with volume growth in Ocean - excluding Hamburg Süd - at 2.2%, as expected slightly below estimated global demand growth of 3-4%. The non-Ocean businesses reports a revenue growth with 6% in Logistics & Services and 11% in Terminals & Towage, reflecting strong growth in volumes mainly driven by commercial wins and new terminals and services. Further, synergies have been realised from increasing collaboration especially between Ocean and gateway terminals, leading to volume growth significantly above the market growth.
Earnings before interests, tax, depreciation and amortization (EBITDA) increased by 5% to USD 669m, negatively impacted by adverse rate of exchange development compared to same period last year of around net USD 100m. Earnings in Ocean of USD 492m was impacted by higher unit costs among others due to adverse developments in bunker price and rate of exchange. For the non-Ocean businesses, the higher volumes in Terminals & Towage led to an improvement in EBITDA from USD 139m to USD 196m, while Logistics & Services reported slightly lower EBITDA of USD 23m from USD 32m.
The underlying result after financial items and tax of negative USD 239m was unsatisfactory. A number of short-term initiatives are being implemented to improve profitability.
Posted at 23:32 パーマリンク
A.P. Møller - Mærsk A/S has tcompleted the sale of Maersk Oil to Total [Shipping Line]
A.P. Møller - Mærsk A/S [A.P. Moller - Maersk] has received all regulatory approvals and has today completed the sale of Mærsk Olie og Gas A/S [Maersk Oil] to Total S.A. [Total], which was announced on 21 August 2017.
A.P. Moller - Maersk has transferred its shares in Maersk Oil to Total and as consideration received 97.5 million Total shares equalling USD 5.6bn as of 7 March 2018. In addition to the shares, Total has assumed a short-term debt of USD 2.5bn via a debt push down from A.P. Moller - Maersk into Maersk Oil, which will be repaid to A.P. Moller - Maersk shortly after closing. The proceeds will after customary closing adjustments be used to reduce debt in A.P. Moller - Maersk.
The accounting gain for A.P. Moller - Maersk amounts to USD 2.6bn. This reflects a locked box interest and the positive development of the Total S.A. share price up to 7 March 2018 and is reduced by Maersk Oil's net profit realized in the period from 1 July 2017 until closing.
As announced in August, A.P. Moller - Maersk plans, subject to meeting its investment grade objective, to return a material portion of the value of the received Total shares to its shareholders during 2018/2019 in the form of extraordinary dividend, share buyback and/or distribution of Total shares.
"I would like to express our appreciation for the commitment demonstrated by Maersk Oil over the past 18 months to uphold a safe and solid performance, while at the same time successfully progressing on major development projects in the North Sea. The focus and results achieved during the time of transition is a testament to the capabilities and professionalism of Maersk Oil's people," says Søren Skou, CEO of A.P. Moller - Maersk and continues:
"With the completion of the Maersk Oil transaction, we have taken a significant step in our strategy to focus A.P. Moller - Maersk on container shipping, ports and logistics".
Denmark will become a new regional anchor point for Total with strong Copenhagen and Esbjerg bases, which will supervise all of Total's operations in Denmark, Norway and the Netherlands. Moreover, the Copenhagen office will host the Senior Vice President of Total's North Sea and Russia Business Unit. A new Technical centre is to be established in Copenhagen, supplementing Total's existing centres in Paris and Pau. Planned development schedules and investments in strategic and sanctioned projects will be upheld.
"We have today secured a financially strong and focused owner of Maersk Oil with a long-term investment interest in the industry. We are very pleased to see Total's plans to deliver growth, value creation and career opportunities for Maersk Oil's employees, as well as upholding the long-term investment plans, especially in the Danish part of the North Sea. Based on Maersk Oil's leading technology position, and its track record as a lean, efficient and trusted partner, Total has made Denmark a regional anchor point for its North Sea business, hereby ensuring a continued Danish stronghold in the North Sea, close to technology and innovation partners at the Danish technical institutions and in the oil and gas service industry," says Claus V. Hemmingsen, Vice CEO of A.P. Moller - Maersk and CEO of the Energy division.
It is an integral part of A.P. Moller - Maersk's purpose to safeguard the long-term viability of its companies by investing in and building value-creating businesses that have a positive impact on society. This is also a guiding principle in the work to define viable solutions for the oil and oil-related businesses.
"By selling Maersk Oil to Total, a leading global oil major, we have ensured the best possible foundation for the continued development of the people, capabilities and assets, on which Maersk Oil has prospered, creating value to the benefit of both A.P. Moller - Maersk and Denmark," says Jim Hageman Snabe, Chairman of the Board of A.P. Moller - Maersk and continues:
"On behalf of A.P. Moller - Maersk, I would like to extend my sincere gratitude to all employees in Maersk Oil for the passion, efforts and devotion to Maersk Oil and A.P. Moller - Maersk displayed by all through the years."
As part of the transaction Total will take over all decommissioning liabilities. The Danish Energy Agency's approval of the transfer conditions that A.P. Moller - Maersk assumes secondary liability for the decommissioning costs related to existing Danish offshore facilities corresponding to Maersk Oil's 31.2 % interest in the Danish Underground Consortium, should Total be unable to cover such costs. Maersk Oil's current provision for these decommissioning costs amounts to USD 1.2bn. A.P. Moller - Maersk's secondary liability will be reduced as part of the redevelopment of the Tyra project as well as future decommissioning of other existing facilities.
Maersk Drilling and Maersk Supply Service remain to have viable solutions established. Improved market conditions in the offshore drilling industry, as well as strategic progress in both businesses has raised A.P. Moller - Maersk's confidence in finding structural solutions for both before the end of 2018, why they have been reclassified as discontinued operations.
Posted at 20:54 パーマリンク
A.P. Møller - Mærsk A/S receives regulatory approval from Danish Energy Agency for the divestment of Maersk Oil [Shipping Line]
The Danish Energy Agency has issued its approval of A.P. Møller - Mærsk A/S' [A.P. Moller - Maersk's] sale of Mærsk Olie & Gas A/S [Maersk Oil] to global oil major Total S.A. [Total], including the conditions for such a transfer.
As part of the agreement Total will take over Maersk Oil's organisation, portfolio, obligations and rights with minimal pre-conditions.
The Danish Energy Agency's approval of the transfer contains conditions, including that A.P. Moller - Maersk, as seller, assumes a secondary liability for the decommissioning of existing Danish offshore facilities corresponding to Maersk Oil's 31.2 % interest in the Danish Underground Consortium, should Total be unable to cover such costs.
The information in this announcement does not change A.P. Moller - Maersk's previous financial guidance for the financial year 2018.
The agreement to sell Maersk Oil to Total was announced on 21 August 2017, subject to regulatory approval from relevant authorities. As previously communicated, the closing of the transaction is expected to take place during first quarter 2018.
Posted at 15:36 パーマリンク
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