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Maersk increases net profit

published: cw 50, 2007 in Logistics & Shipping

Profit before depreciation, etc. for the first nine months of 2007 increased in USD by 28% compared to the same period in 2006. Unchanged from the interim report of 29 August 2007, the total net profit for 2007 is expected to be in the order of 20% above the 2006 net result of USD 2.7 billion.
Nils S. Andersen, Maersk Group CEO, says:


“Today we have published an announcement to the Copenhagen Stock Exchange covering the first nine months of 2007 and outlook for the year. In overall terms, the development is in line with the expectations stated in the interim report of 29 August this year. The announcement, for the first time, also includes financial information for the first nine months of the year.

The net result shows improvement for the Group as a whole. The container business is showing increased profitability, although the result is still far from satisfactory. The Group’s net result is also affected positively by gains on sales of ships and rigs in Maersk Tankers and Maersk Contractors and improved earnings in Maersk Supply Service. Despite a higher production of oil and gas compared to 2006, the net result for the oil and gas activities is below that of the same period last year due to increased exploration activities, a higher level of depreciation, and increased taxes.

The Group’s total result is improving, which gives us a good basis for a continued focus on creating progress.”

In summary the results are as follows:

  • The profit before depreciation, amortisation, etc. increased by 28% to USD 8,261 million compared to the same period in 2006. The net profit for the period increased by 37% to USD 2.600 million compared to the same period in 2006, particularly impacted by considerable sales gains.
  • The container activities showed as expected considerable progress to a positive result before financial items and tax (EBIT) amounting to USD 626 million compared to a negative result for the same period in 2006 amounting to USD 125 million.
  • The net result from the oil and gas activities was as expected considerably lower, primarily as a result of increased depreciation and amortisation, higher exploration costs and increased taxes. The average oil price was at level with the same period 2006.
  • Result for tankers, offshore and other shipping was considerably higher than in the same period last year due to gains on sales of ships and rigs.
  • Depreciation and amortisation, etc. increased to USD 3,300 million (USD 2,349 million)
  • The oil price (Brent) was USD 67 per barrel on average and 15% higher than the price at the beginning of the year. By 30 September 2007, the oil price was 38% higher than it was 1 January 2007 with a significantly negative effect for the result of the period, as a result of increased fuel costs as well as value adjustment of oil price hedge contract with USD 132 million.
  • Total tax, etc. increased by USD 668 million to USD 3,133 million.
  • The USD exchange rate was compared to DKK on average 8% lower than the same period 2006 with negative effect on the period’s revenue and net profit in DKK.
  • Cash flow from operating activities increased by 51% to USD 5.7 billion. Cash flow used for investing activities increased considerably to USD 6.5 billion.


    • Outlook for 2007
    The outlook for the result for 2007 is unchanged compared to the latest announcement of 29 August 2007.

  • Revenue at the level of USD 50 billion (USD 44.5 billion).
  • Net profit from continuing operations in the order of 20% above the 2006 result, which was USD 2.7 billion. For discontinuing operations, a negative result in the order of USD 0.1 billion (USD 0.0 billion) is expected.
  • Cash flow from operations is now expected to be in the order of USD 6.5 billion against previously expected USD 6.0 billion (USD 4.1 billion).

    • The outlook is still sensitive to changes in freight rates and volumes as well as in oil prices and exchange rates for the remaining part of the year. With regards to cash flow from operations, the cash flow will be affected negatively by considerable tax payments in the fourth quarter. Furthermore, the actual timing of payments around year-end is subject to uncertainty

    Source: Maersk.com


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