Maersk Focuses On Operational Optimisations To Mitigate Impact Of Negative Market Conditions

In response to challenging supply-demand imbalances, the Group continues to execute on factors that are within our control by reducing cost and delivering high operational performance.

The Group delivered a profit of USD 118m (USD 1.1bn) negatively impacted by the average container freight rates and oil price. The return on invested capital (ROIC) was 2.0% (10.2%).

Image Credits: maersk.com
Image Credits: maersk.com

The underlying profit for the Group of USD 134m (USD 1.1bn) was significantly lower than for the same period last year for all businesses except Damco.

Image Credits: maersk.com
Image Credits: maersk.com

“In a second quarter impacted by low growth and falling prices in nearly all our markets, the Maersk Group delivered an underlying profit of USD 134m. The result is unsatisfactory. Cost reductions and operational optimizations, however, made a significant contribution to mitigating the impact of the negative market conditions. Maersk Oil has reduced operational costs by 25 percent, upholding a break-even at USD 40-45 per barrel. The costs in Maersk Line have been reduced to an all-time low level and are under USD 2,000/FFE for the first time. Our financial position remains strong with a liquidity reserve of USD 11.5bn. The Group’s expectation for 2016 of an underlying result significantly below last year is unchanged. To ensure the future strength, profitability and development of new growth opportunities of the company, the Board of Directors have initiated a strategic review of the company and will report on progress of the review before the end of Q3, 2016,” says Maersk Group CEO Søren Skou.

Highlights:

  • In a second quarter impacted by low growth and falling prices in nearly all our markets, the Maersk Group delivered an underlying profit of USD 134m.
  • Cost reductions and operational optimizations made a significant contribution to mitigating the impact of the negative market conditions.
  • The Group’s expectation for an underlying result for 2016 is unchanged significant below last year (USD 3.1bn).
    Maersk Line delivered an underlying loss of USD 139m, despite costs being reduced to all time low level of under USD 2,000/FFE. Expectation for 2016 maintained.
  • Maersk Oil achieved an underlying result of USD 130m and a ROIC of 12.1% and expects a small positive underlying result for 2016.
  • Progress on the initiated strategic review of the Group will be communicated before end of Q3, 2016.

Reference: maersk.com

Disclaimer :
The information contained in this website is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.

Do you have info to share with us ? Suggest a correction

Latest Shipping News You Would Like:

Get the Latest Maritime News Delivered to Your Inbox!

Our free, fast, and fun newsletter on the global maritime industry, delivered everyday.

Leave a Reply

Your email address will not be published. Required fields are marked *