AP Moller-Maersk reports loss of US $1 bn

04.03.2010 (16:19)

A P Moller-Maersk has blamed fall in freight rates and global economic crisis for the dismal financial performance of the group in 2009. In 2009, it suffered losses of US $ 1 bn as against a profit of US $ 3.5 bn.

In 2009, the A.P. Moller - Maersk Group was significantly negatively affected by the global economic crisis. Freight rates for the Group’s container activities were 28% lower than in 2008, resulting in a negative segment result of USD 2.1 billion for container activities. Tanker rates were also substantially lower than in 2008. The average price of crude oil was 36% lower in 2009 than in 2008, while the Group’s share of oil and gas production was at the same level as in 2008.

"The loss is significant, but 2009 was an extraordinary year with historically low rates and low demand. We managed to limit the loss by saving around USD 2 billion and we will continue to strengthen our competitiveness even further. We expect to return to modest profits in 2010," says Group CEO Nils S. Andersen.

Oil and gas activities, APM Terminals, Maersk Supply Service, Maersk Drilling, Damco and the Dansk Supermarked Group yielded positive results despite lower oil prices and lower demand as a consequence of the economic crisis, a press release said.

Cost reductions in the range of USD 2.0 billion were achieved in the Group’s business areas and group functions in 2009, of which USD 1.6 billion related to container activities. Savings were primarily achieved by restructurings, reducing fuel consumption, optimising networks and renegotiating supplier contracts.

In 2009, it was decided to phase out shipbuilding activities at Odense Steel Shipyard as existing orders are completed and to sell Norfolkline to DFDS.

To ensure the long-term funding position, the Group decided in 2009 to diversify its funding sources by placing bonds denominated in euro and Norwegian kroner, yielding gross proceeds of USD 1.8 billion. In addition, the Group sold own B shares corresponding to approximately 5.7% of A.P. Møller - Mærsk A/S’ total share capital, yielding gross proceeds of USD 1.6 billion.

The cash flow from operating activities was USD 4.7 billion corresponding to DKK 25 billion (2008: USD 8.5 billion corresponding to DKK 43 billion) – negatively affected by lower earnings.

The cash flow used for capital expenditure amounted to USD 7.9 billion corresponding to DKK 42 billion. (2008: USD 10.3 billion corresponding to DKK 52 billion).

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