A.P. Moller Maersk announced improved Q3 financial results

“We deliver a good result for the quarter considering the challenging economic environment. Thanks to our rate initiatives and cost reductions, Maersk Line is back in black figures year-to-date, and the high oil price supports a satisfactory result for Maersk Oil. We are expanding our terminals network in Latin America, Russia and other growth markets and expect our strategic initiatives to support both our returns and earnings stability as we move forward.”

The Group delivered a profit of USD 933m (USD 371m) and a return on invested capital (ROIC) of 8.3% (4.9%) for Q3. Cash flow from operating activities was USD 2.9bn (USD 2.1bn) and cash flow used for capital expenditure was USD 678m (USD 4.8bn). The Group’s equity ratio was 52.2% (51.9%) and net interest-bearing debt was USD 14.8bn (USD 14.5bn).

The third quarter result was better than expected, particularly in Maersk Line and Maersk Oil, while the result was negatively affected by vessel impairments of USD 267m on some of Maersk Tankers’ crude and product tanker segments.

Maersk Line’s profit for the period was USD 498m (loss of USD 289m) with an average rate increase of 5.7% to 3,022 USD/FFE. Rates were higher on all main trades. Volumes were unchanged at 2.1m FFE.

Head haul volume declined by 15% on the Asia – Europe trade. Average unit costs decreased by 6% due to decreased bunker consumption per FFE and network optimisation. Maersk Line announced rate increases especially for reefer containers with impact from January 2013.

Highlights for the Group for the first 9 months 2012 Revenue decreased slightly to USD 44.3bn (USD 45.3bn), primarily due to lower oil entitlement production partly offset by higher container volumes and slightly higher average freight rates.

Maersk Line made a profit of USD 126m (USD 40m) for the first nine months. The volume increased by 9% to 6.5m FFE and average freight rates, including bunker surcharges, were 0.2% higher. Cash flow from operating activities was USD 999m (USD 881m) and cash flow used for capital expenditure was USD 3.0bn (USD 2.3bn).

Outlook for 2012 The A.P. Moller - Maersk Group expects a result for 2012 around USD 3.7bn (USD 3.4bn in 2011) with an impairment of USD 267m in Maersk Tankers recognised in Q3. Cash flow used for capital expenditure is expected to be lower than 2011 (USD 9.8bn) while cash flow from operating activities is expected to be at the same level as 2011 (USD 7.3bn).

Maersk Line still expects a modest positive result in 2012 based on higher average rates in the second half of the year. Global demand for seaborne containers is expected to grow modestly in 2012 with a decline in inbound European volumes.

The total result from all other activities is still expected to be lower than 2011, excluding divestment gains and impairments, primarily due to lower expected result in Dansk Supermarked and Maersk Supply Service. < Korea Shipping Gazette >