AP Moller-Maersk reported net profit of 118 million USD in second quarter of 2016, representing a decrease of 89% yoy. The bad finance report of the group was negatively impacted by the low container freight rates and low oil prices. The underlying profit for the Group amounted to 134 million USD, which is significantly lower than for the same period last year for all businesses except Damco. AP Moller-Maersk’s EBITDA dropped by 32.4% yoy to 1.78 billion USD, while EBIT decreased by 57.4% yoy to 0.66 billion USD. The group’s operating expenses decreased during the reported period by 808 million USD, due to lower bunker prices and cost saving initiatives, but revenues also slid by 1.70 billion USD (-16% yoy) to 8.861 billion USD. The main factor for the reduced revenues are low container flight rates (-24% yoy) and lower oil price (-26% yoy), which were partially offset by the increased container turnover (+6.9% yoy) and higher oil production (+8.2% yoy).
Maersk Line posted finance loss of 151 million USD in Q2 2016, compared to profit of 507 million USD an year earlier. The container line continue optimization of Asia-North Europe network, offering customers better flexibility and reliability. The ship operator succeeded to expand its market stake, as transported volume increased by 6.9% yoy to 2.7 million FFE, while global container demand is estimated to have grown around 2%. The Maersk Line capacity grew by 2.2% in Q2 2016 to 3.1 million TEU. The main reason for the finance loss of the container shipping operator are the record low freight rates, which dropped by 24% in second quarter and deteriorated across all trades. The company’s cash flow used for capital expenditures declined to 109 million USD, due to lower vessel investments and divestments. However, Maersk Line succeeded to reduce costs of Q2 2016 by 10% yoy, mostly due to lower bunker costs.
Maersk Oil reported 4.4% yoy profit decrease to 131 million USD, mostly due to lower oil prices. The production of the company rose by 8.2% to 331,000 boepd, primarily driven by higher entitlement share in Qatar and increased efficiency in UK. The company’s operating expenses, excluding operation costs, reduced by 25% to 475 million USD. The total cost savings by the end-2016 are now expected to be 25-30% compared to end-2014.
Maersk Drilling profit also slid by 24.8% yoy to 164 million USD, mostly due to delaying offshore business and low oil prices. Cost has been reduced by 8% compared to Q2 2015 and by more than 15% since the launch of the cost reduction program in Q4 2014. The average operational uptime was 98% (98%) for the jack-up rigs and 99% (96%) for the floating rigs.
APM Terminals reported 30.4% yoy profit decrease in Q2 2016 to 112 million USD. The throughput of the port operator increased by 2.6% yoy after acquisition of Grup TCB, while the global market grew by 2.3%. The lower profit comes mostly by lower volumes of oil dependent terminals in Latin America, North-West Europe and Egypt.