Maersk profit miss puts CEO's shipping route under scrutiny
Copenhagen
AP MOLLER-Maersk's decision to focus on transport and jettison oil was put under pressure on Friday as the world's largest container shipping firm missed profit forecasts.
Although Maersk's chief executive Soren Skou said he remained positive about the outlook for global trade, the company's shares were down 2.9 per cent to 10,060 Danish crowns (S$2,202) by 0925 GMT after the fourth-quarter profit miss.
"Guidance for 2018 was vague," Fearnley analyst Espen Fjermestad said of Maersk's forecast for earnings before interest, tax, depreciation and amortisation (Ebitda). With higher fuel costs and little sign of higher freight rates, he said there was "more downside than upside for expectations for 2018".
Mr Skou, who has staked his future on Maersk as a transport business, said the level of global trade looks positive despite more talk of protectionism and that orders for new vessels are at a historic low compared to current fleet size.
Shares in Maersk are down by more than 30 per cent from a July 2017 peak when optimism around freight rates and a turnaround in global container shipping began to fade.
The industry, which has been hit by years of overcapacity and slow economic growth, saw early signs of a turnaround in early 2017, but freight rates fell in the second half.
"I'm still very optimistic on the fundamentals of the global container shipping industry," Mr Skou said in an interview following Friday's quarterly results.
Maersk said that it expects Ebitda at US$4-5 billion, compared with analyst expectations of US$5.3 billion.
The company announced a restructuring plan in 2016 focused on shipping, which led to a US$7.45 billion sale of energy arm Maersk Oil to Total last August. With oil prices rising again, it now has to prove to investors and analysts that it took the right course. Of the 23 analysts covering the stock, 11 are positive and five are negative, while the average target price is 12,547 crowns.
But while Ebitda rose to US$844 million from US$605 million, this fell short of the US$896 million forecast by analysts in a Reuters poll.
Maersk expects underlying net profit to rise this year and 3 to 4 per cent growth in seaborne container transportation, after a 5 per cent advance last year, it said. REUTERS
