COPENHAGEN: Danish oil and shipping group A.P. Moeller-Maersk saw its revenue decline 15.3 percent in 2015, the company said Wednesday.
The group’s revenue for the full year 2015 was 40.3 billion U.S. dollars, down from 47.6 billion dollars in 2014, the company said in its annual report.
Maersk said the decline owes much to lower oil price and lower average container freight rates only partly compensated by higher entitlement production.
As such, the group had also impaired the value of a number of its oil business’ assets by 2.6 billion dollars after tax, given the expectation that the oil price will remain at a low level for a longer period.
The group reported an underlying profit of 3.1 billion dollars in 2015, down from 4.5 billion dollars in 2014.
Net profit, which was primarily impacted by the net impairments, ended up at 925 million dollars in 2015, down from the 5.2 billion dollar record net profit the company posted the year before.
The container shipping division, Maersk Line, made a profit of 1.3 billion dollars in 2015, down from 2.3 billion dollars profit in 2014, owing to lower container freight rates across all trades except North America.
The container-shipping business was hit by a 16 percent lower freight rates and only partially offset by a 0.6 percent increase in volumes.
“The freight rate decline was largely attributable to bunker price savings being passed through to customers and to deteriorating market conditions,” Maersk said in the report.
Maersk Oil made a loss of 2.1 billion dollars in 2015, negatively impacted by the 2.6 billion dollars impairments that were primarily related to production assets with short lifetime such as Kazakhstan, Kurdistan and the UK as well as its deepwater development assets in Angola and Brazil.
Meanwhile, the terminals and ports business made a profit of 654 million dollars, down from 900 million dollars profit the year before, as the low oil price resulted in a sharp decline in import volumes into oil producing countries in West Africa, Russia and Brazil.
The drilling and rig business delivered 751 million dollars profit, up from 478 million dollars a year ago.
In 2016, Maersk expects an underlying profit “significantly below last year’s 3.1 billion dollars.”
For the container shipping and drilling businesses, it also expects an underlying result significantly below that in 2015.
Maersk Oil expects a negative underlying profit, while the terminal business forecast an underlying profit around the 2015 level.
The group also warned that the guidance for 2016 is subject to considerable uncertainty, not least due to developments in the global economy, the container freight rates and the oil price.
Maersk shares fell 6 percent minutes after trading opened on the Copenhagen Stock Exchange Wednesday, as investors reacted to the full-year result.
