Maersk quar­terly profit lags be­hind fore­casts

The Gulf Today - Business - - INTERNATIONAL -

COPENHAGEN: Ship­ping group A.P. Moller-maersk missed firstquar­ter core profit ex­pec­ta­tions on Thurs­day but kept guid­ance for the year un­changed, even though it flagged in­creased un­cer­tain­ties re­lated to geopo­lit­i­cal risks and trade ten­sions.

The Dan­ish group’s earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) for Jan­uary-march to­talled $669 mil­lion, well be­low the $852 mil­lion fore­cast by an­a­lysts in a Reuters poll.

Earn­ings were af­fected by pres­sure on freight rates and higher unit costs among other fac­tors. Chief Ex­ec­u­tive Soren Skou called the re­sults “un­sat­is­fac­tory”, es­pe­cially in the ocean-re­lated part of the busi­ness, and said he would implement “a num­ber of short-term ini­tia­tives to im­prove prof­itabil­ity,” with­out giv­ing any de­tails.

Af­ter be­ing hit by a slump in ship­ping and oil in­dus­tries in re­cent years, Maersk group is re­struc­tur­ing and di­vest­ing its en­ergy busi­nesses - in­clud­ing oil ex­plo­ration, oil tankers and sup­ply ser­vices - to fo­cus on ship­ping, ports and lo­gis­tics.

Skou, who in pre­vi­ous quar­ters played down the risk of a global trade war hurt­ing the group’s busi­ness, also noted “in­creased un­cer­tain­ties due to geopo­lit­i­cal risks, trade ten­sions and other fac­tors im­pact­ing con­tainer freight rates, bunker prices and rate of ex­change”.

De­spite the dis­ap­point­ing re­sults, Maersk said it still ex­pects 2018 EBITDA in the $4 bil­lion-$5 bil­lion range.

Rev­enue be­tween Jan­uary and March stood at $9,253 mil­lion, beat­ing an­a­lysts’ fore­casts of $8,755 mil­lion.

Mean­while, Maersk Tankers said it would wind down its cus­tomer agree­ments in Iran by Novem­ber fol­low­ing new US sanc­tions on Tehran.

“We will per­form cus­tomer agree­ments en­tered into be­fore May 8 and en­sure that they are wound down by Novem­ber 4, as re­quired by the re-im­posed US sanc­tions,” the com­pany said in an emailed state­ment.

“We are closely mon­i­tor­ing de­vel­op­ments and as­sess­ing the po­ten­tial im­pact on our ac­tiv­i­ties while stay­ing in di­a­logue with our cus­tomers to in­form them in case of changes,” Maersk Tankers said.

Reuters

A Maersk ship de­parts from New York Har­bour, US.

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