Danish conglomerate A.P. Møller – Maersk A/S narrowed its loss for the year ended December 31, 2017 to USD 1.16 billion, compared to a loss of USD 1.89 billion seen in the previous year.
For the continuing operations, A.P. Moller – Maersk reported a revenue of USD 30.9 billion, up from USD 27.3 billion seen in 2016, and an underlying profit of USD 356 million, against a loss of USD 496 million reported in the previous year.
“The past year was unusual for A.P. Moller – Maersk, characterized by a cyber-attack and operational challenges in a few hubs. We succeeded in growing the revenue by 13%, improving cash flow and increasing underlying profits from a low 2016 base,” Søren Skou, CEO of A.P. Moller – Maersk, said.
Revenue increased due to revenue growth in Maersk Line (excluding Hamburg Süd) of USD 3.1 billion or 14.9%, predominantly due to higher average freight rates and higher volumes. In addition, Hamburg Süd added revenue for December of USD 0.5 billion. Overall, the rest of the businesses reported revenue on a par with last year, except Maersk Container Industry, which grew revenue from USD 564 million to USD 1 billion.
The underlying profit was positively impacted by an improvement in Maersk Line excluding Hamburg Süd of USD 905 million compared to 2016, in the low end of the latest guidance, which stated an improvement of around USD 1 billion.
The underlying profit for the continuing businesses was negatively impacted by the effects of the cyber-attack in Q3 estimated at USD 250-300 million.
“However, the financial result shows that significant improvements are still needed. On the other hand, when we look at the strategic business transformation, progress throughout the year has indeed been satisfactory. We have taken the first steps towards the integration of our container shipping, ports and logistics businesses and our digital transformation is taking shape. At the same time, we have found new owners for part of the energy-related business units,” Skou added.
Highlights from 2017 include USD 14 billion worth of M&A transactions, including welcoming Hamburg Süd to the A.P. Moller – Maersk family, agreement to sell Maersk Oil, sale of Maersk Tankers and Mercosul – the Brazilian container line – as well as the sale of the remaining 19% stake in Dansk Supermarked Group. The divestment of Maersk Oil is expected to close in Q1 2018. Additionally, structural solutions for Maersk Drilling and Maersk Supply Service are expected before the end of 2018.
“After a successful acquisition of Hamburg Süd, the integration is off to a good start, with both carriers growing volumes during the first months. A smooth integration of Hamburg Süd remains a top priority for 2018,” according to Skou.
For 2018, A.P. Moller – Maersk expects an underlying profit above USD 356 million reported in 2017 and earnings before interests, tax, depreciation and amortisation (EBITDA) in the range of USD 4-5 billion, up from USD 3.5 billion.