Maersk Swings to Profit, Expects Earnings to Rise This Year
By Dominic Chopping
A.P. Moeller-Maersk A/S (AMKBY) swung to a profit in the fourth quarter, and said it expects 2018 to be a more successful year as it continues its transition into a global supply-chain major.
The Danish shipping and oil company reported a fourth-quarter net profit of $386 million, from a $2.68 billion loss in the same period last year. Revenue rose to $8.17 billion from $7.08 billion.
Analysts in a FactSet poll had expected net profit of $400 million and revenue of $8.01 billion.
The group said it expects 2018 underlying profit to land above the 2017 result of $356 million, while earnings before interest, tax, depreciation and amortisation is seen between $4 billion and $5 billion, from $3.5 billion in 2017.
The company's shipping unit, Maersk Line, which contributed 80% of the group's revenue in the quarter, made a $53 million underlying profit for the quarter, compared with a loss of $155 a year earlier. Maersk said freight rates slowed from the beginning of the fourth quarter after peaking in the second quarter.
Global container demand grew by about 5% in 2017, with particularly high growth in the first three quarters of the year, while growth in 4Q slowed down.
Chinese import growth was strong in the first half of 2017, but slowed in the second half of the year following similar developments in Chinese economic activity. Tightened restrictions on pollution in northern China, together with initiatives to restrict imports of waste and scrap materials also impacted Chinese imports, it said.
"We continue to believe that the liner industry will consolidate further, which we will benefit from, and that there is a low need for capital expenditure as future ordering is expected to stay low for the coming years," Chief Executive Soren Skou said.
The company maintained its dividend at 150 Danish krone ($24.70).
-Write to Dominic Chopping at email@example.com; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
February 09, 2018 03:15 ET (08:15 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.