Maersk Group has released its Q1, 2016 financial results, in which the company delivered a profit of US$224 million, with six out of eight businesses returning to profit, compared to $1.6 billion of profit made in Q1, 2015.
Its underlying profit was recorded at $214 million in Q1, 2016, in comparison to $1.3 billion in the same period a year prior.
The result was negatively impacted by the low oil price and low average container freight rates. The return on invested capital (ROIC) was 2.9%, compared to 13.8% in the same period in 2015.
The underlying profit was significantly lower than the same period in 2015 due to all businesses except Maersk Drilling, Maersk Tankers and Damco being lower and Svitzer being at the same level.
In comparison, Maersk’s previous profit gain in Q1, 2015 was positively impacted by an after tax gain of $223 million from the sale of its shares in Danske Bank.
Nils S. Andersen, CEO of Maersk, said: “The Maersk group delivered an underlying profit of $214 million in the first quarter . While market conditions remain challenging, we continue to adjust our cost base to the new conditions and maintain a good operational performance across our businesses.
“We maintain our focus on strengthening the group’s position in the market and have completed acquisitions within APM Terminals and Maersk Oil, and in Maersk Line we have defended our market leading position.”
Despite lower results, Maersk Line was able to improve utilisation, lowered unit costs by 16% year-on-year, as well as defended its market leading position, delivering an underlying profit of $32 million.
The result compounds a turbulent time for the global liner industry, with overcapacity and weak demand synergising to leave carriers in difficult times.
Many carriers have attempted to mitigate the situation by joining alliances, or even merging operarions, with light still not appearing at the end of the tunnel.