Danish shipping group A.P. Moller Maersk reported third quarter core profit below expectations on Tuesday and said it now expects only a positive underlying profit, backing away from a previous forecast.
Maersk, which agreed to sell its oil and gas business to Total in a $7.5 billion deal this year, now has to prove to investors that the firm’s strategy to focus on transport and logistics is the right one even with oil prices rising again.
Quarterly profit from its Maersk Line shipping business undershoot market expectations as a cyber attack in June weighed more than expected and freight rates declined compared to the second quarter.
Shares slipped more than 5 per cent due to the soft performance in the all-important container business.
Maersk had previously expected underlying profit for the year above the $711 million from 2016.
Its new guidance is adjusted for the discontinued operations of its energy assets which it said meant the year-ago number for continued operations was a loss of $546 million.
“This is actually a small upward revision ... What we’ve said was that we would get a better result than in 2016 and when we reclassify the result last year was actually negative,” Maersk CFO Jakob Stausholm told Reuters.
For its key container business it now expects an improvement of around $1 billion in underlying profit versus a previous guidance of above $1 billion due to higher costs related to a June cyber-attack and higher bunker fuel costs.
“The third quarter has been more difficult for us and we could have grown more if we hadn’t had this terrible criminal cyber attack,” Stausholm said. The company put the cost of the cyber attack at $250-300 million.
He also said that container freight rates had been worse than expected during the quarter.
The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) stood at $978 million, below the $1.2 billion average forecast in a Reuters poll.