A.P. Moller-Maersk Group on a beautiful voyage

The group reported that it delivered a profit of $933 million and a return on invested capital (ROIC) of 8.3 per cent for this year’s third quarter. Cash flow from operating activities was $2.9 billion and cash flow used for capital expenditure was $678 million. The group’s equity ratio was 52.2 per cent and net interest-bearing debt was $14.8 billion.

The third quarter result was better than expected, particularly in Maersk Line and Maersk Oil, while the result was negatively affected by vessel impairments of $267 million on some of Maersk Tankers’ crude and product tanker segments.

Maersk Line’s profit for the period was $498 million with an average rate increase of 5.7 per cent to $3,022 per FFE. Rates were higher on all main trades.

Maersk Line announced rate increases especially for reefer containers with impact from January 2013.

“Maersk Line has done what they set out to do when we entered the second quarter and will continue their efforts to secure rates at a level where we can achieve a fair return on our investments,” said the group’s chairman Nils S. Andersen.

Maersk Oil’s profit for the period was $243 million. The result was negatively impacted by a 23 per cent decline in share of production to 240,000 barrels of oil equivalent per day, a lower average oil price of $109 per barrel ($113 per barrel), as well as a change in the decommissioning relief tax in the UK. Maersk Oil completed three exploration/appraisal wells (five wells) and exploration costs were $268million. The Caporolo discovery offshore Angola was announced.

“We continue to make progress and receive positive news, most recently from Chissonga in Angola, and we are confident that we will reach our production target of 400,000 barrels per day by 2020,” Andersen said.

The group expects a result for 2012 around $3.7 billion, higher than $3.4 billion in 2011, with an impairment of $267 million in Maersk Tankers recognised in this year’s third quarter. Cash flow used for capital expenditure is expected to be lower than 2011 ($9.8 billion) while cash flow from operating activities is expected to be at the same level as 2011.

Maersk Line still expects a modest positive result in 2012 based on higher average rates in the second half of the year. Global demand for seaborne containers is expected to grow modestly in 2012 with a decline in inbound European volumes.

Maersk Oil now expects a result for 2012 above the result for 2011 ($2.1 billion) including the $900m impact from the settlement of the tax dispute in Algeria. The expected result is based on a share of production of 258,000 boepd during 2012 and an average oil price of $110 per barrel for the remainder of the year. Exploration costs are now expected to be around $900 million.