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MarketScreener Homepage  >  Equities  >  NASDAQ OMX COPENHAGEN  >  AP Moller-Maersk    MAERSK B   DK0010244508

AP MOLLER-MAERSK (MAERSK B)
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AP Moller Maersk : Maersk steers annual shipping profit forecast lower

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11/07/2017 | 11:55am CEST
A man walks past empty Maersk shipping containers at Peel Ports container terminal in Liverpool

COPENHAGEN (Reuters) - A.P. Moller-Maersk (>> AP Moller-Maersk), the world's largest container shipping group, cut the profit forecast for its core business on Tuesday after a costly cyber attack and a weaker than expected third quarter.

COPENHAGEN (Reuters) - A.P. Moller-Maersk (>> AP Moller-Maersk), the world's largest container shipping group, cut the profit forecast for its core business on Tuesday after a costly cyber attack and a weaker than expected third quarter.

Maersk, which agreed to sell its oil and gas business to Total (>> Total) in a $7.5 billion (£5.7 billion) deal this year, has to prove to investors that the firm's strategy to focus on transport and logistics is the right one even with oil prices rising again.

Expectations for the container shipping business had been high after Chief Executive Soren Skou said in August that fundamentals were "at their best since 2010".

However, Maersk's freight rates declined 1.1 percent compared to the second quarter, further signs of the impact of overcapacity that has dogged the industry.

"The freight rates sticks out as the most negative element ... I'm very surprised that they as a minimum can't deliver the same rates as in the second quarter," said Sydbank analyst Morten Imsgard. Sydbank has an 'hold' rating on the stock.

A sweeping consolidation of container lines, which transport everything from televisions to fresh fruit, has helped the industry recover from a severe downturn that culminated in last year's collapse of South Korea's Hanjin Shipping.

Maersk shares are up about 25 percent so far this year, but has slipped since mid-July due to softer growth in freight rates. Maersk shares were trading 4 percent lower at 1000 GMT.

The group reported a net loss of $1.4 billion in the third quarter after it took a $1.75 billion impairment on its offshore drilling business. Analysts had expected a $383 million profit.

CYBER ATTACK

For the container business, Maersk now expects an improvement of around $1 billion in underlying profit versus a previous guidance of above $1 billion due to higher costs related to the June cyber-attack and higher bunker fuel costs.

"The third quarter has been more difficult for us and we could have grown more if we hadn't had this terrible criminal cyber attack," Maersk CFO Jakob Stausholm told Reuters.

The company put the cost of the cyber attack at $250-300 million after it hit its computers and delayed cargoes.

Stausholm also said that container freight rates had been worse than expected during the quarter but that the market still looked "reasonable".

For the whole group, Maersk had previously expected underlying profit for the year above the $711 million from 2016.

Its new guidance is adjusted for the discontinued operations of its energy assets which it said meant the year-ago number for continued operations was a loss of $546 million.

"This is actually a small upward revision ... What we've said was that we would get a better result than in 2016 and when we reclassify the result last year was actually negative," Stausholm.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $978 million, below the $1.2 billion average forecast in a Reuters poll.

(Reporting by Stine Jacobsen; Editing by Keith Weir)

By Stine Jacobsen

Stocks treated in this article : Total, AP Moller-Maersk
Stocks mentioned in the article
ChangeLast1st jan.
AP MOLLER-MAERSK 1.77% 9430 Delayed Quote.-13.01%
TOTAL 0.29% 54.9 Real-time Quote.19.23%
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Financials ($)
Sales 2018 38 570 M
EBIT 2018 818 M
Net income 2018 2 592 M
Debt 2018 10 038 M
Yield 2018 2,10%
P/E ratio 2018 17,40
P/E ratio 2019 19,99
EV / Sales 2018 1,04x
EV / Sales 2019 0,96x
Capitalization 29 955 M
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Technical analysis trends AP MOLLER-MAERSK
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 1 713 $
Spread / Average Target 15%
EPS Revisions
Managers
NameTitle
Søren Skou Chief Executive Officer
Jim Hagemann Snabe Chairman
Bhushan Ivaturi Chief Information Officer & Vice President
Ane Mærsk Mc-Kinney Uggla Vice Chairman
Jan Leschly Director
Sector and Competitors
1st jan.Capitalization (M$)
AP MOLLER-MAERSK-13.01%29 955
BOLLORÉ-16.65%12 978
HAPAG-LLOYD AG3.34%7 214
COSCO SHIPPING HOLDINGS CO LTD-39.44%5 471
ORIENT OVERSEAS (INTERNATIONAL) LTD-31.39%4 133
MITSUI OSK LINES LTD-13.22%3 551