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In ‘Year of Transformation’ A. P. Moller-Maersk Grows Revenue & Underlying Profit

A.P. Moller-Maersk has said it created a fourth-quarter profit of $386 million, attributing the rise in profits mainly to its container shipping business, Maersk Line. Actual benefit for the ongoing functions was $ 356 million, compared to a loss of $ 496 million in 2016. The money contains $ 1 billion dollars relevant to the transport and logistics business, in accordance with assistance, it said in a release.

“The past year was uncommon for A.P. Moller-Maersk, classified by a cyber strike and functional difficulties in a few locations. We have been successful in increasing the income by 13 %, enhancing income and increasing underlying profits from a low 2016 base. However, the financial result reveals that significant developments are still needed. On the other hand, when we look at the ideal company modification, improvement throughout the season has indeed been acceptable. We have taken the first steps towards the incorporation of our container shipping, ports and logistics businesses and our electronic modification is taking shape. At once, we have found new owners for the part of the energy-related business units,” said Mr Søren Skou, CEO of A.P. Moller-Maersk.

Highlights from 2017 consist of $ 14 billion dollars worth of M&A transactions, such as pleasant Hamburg Süd to the A.P. Moller-Maersk family, contract to sell Maersk Oil, selling of Maersk Tankers and Mercosul—the Brazilian container line —as well as the sale of the remaining 19 % share in Dansk Supermarked Group. Additionally, structural solutions for Maersk Drilling and Maersk Supply Service are required before the end of 2018.

Maersk Line and Damco were seriously suffering from a cyber strike in Q3. Maersk Line retrieved quickly with strong quantity development and near all-time low unit costs toward the end of the season. More powerful collaboration between Maersk Line and APM Terminals produced the first incorporation synergies of around $ 0.1 billion dollars despite the negative impact from the cyber strike and functional difficulties in key locations.

The acquisition of Hamburg Süd is an integral aspect of the Maersk growth strategy. Together, the two carriers have around 19 % global capacity market share, more than 4 million TEUs, more than 4 million TEUs in container capacity, and an unmatched network of services. The Germany-based carrier will remain an independent brand, with only operational aspects consolidating with Maersk Line. Cost synergies from the merger are expected to be between $ 350-400 million by 2019, mainly from developing and optimising the systems as well as standard procurement.

“After a successful acquisition of Hamburg Süd, the incorporation is off to a nice beginning, with both carriers growing amounts during the first months. An smooth integration of Hamburg Süd continues to be a top priority for 2018,” says Mr Skou.

Maersk created progress on the digital transformation of the main company, moving client dealings online and digitising the way resources are managed. A series of digital initiatives were released during the year to speed up the transformation of the industry, from legacy paper-based to digital customer -centric procedures and services, allowing new product offerings.

These consist of the release of Twill, searching for shipping forwarder and Remote Container Management (RCM) for reefer customers; a partnership with Microsoft for cloud computing and digital product development; and a joint venture with IBM to make business easier for everyone, by digitising the exchange of information relevant to business, the release said.