Interim / Quarterly Report • Aug 13, 2015
Interim / Quarterly Report
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A.P. Møller - Mærsk A/S
Unless otherwise stated, all figures in parenthesis refer to the corresponding figures for the same period prior year.
The interim report contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are outside A.P. Møller - Mærsk A/S' control, may cause actual development and results to differ materially from expectations contained in the interim report.
For Q2 2015
The Maersk Group delivered a satisfactory profit in Q2 of USD 1.1bn (USD 2.3bn) negatively impacted by the lower oil price and lower average container freight rates. The return on invested capital (ROIC) was 10.2% (18.6%). The result for Q2 last year was positively impacted by a USD 2.8bn gain from the sale of the majority share of Dansk Supermarked Group partly offset by impairments of USD 1.7bn on Brazilian oil assets.
The underlying profit was USD 1.1bn (USD 1.2bn) with decreases in Maersk Line, Maersk Oil and APM Terminals and increases for Maersk Drilling and APM Shipping Services.
The Group's revenue decreased by USD 1.4bn or 11.9% due to lower oil price and lower average container freight rates. The operating expenses decreased by USD 966m mainly due to lower bunker prices and cost saving initiatives.
Cash flow from operating activities remained at a high level of USD 1.8bn (USD 1.7bn) while the Group continues to invest in profitable growth with a net cash flow used for capital expenditure of USD 1.7bn (USD 1.4bn), excluding the sale of shares in Danske Bank of USD 4.8bn.
With an equity ratio of 59.7% (61.3% at 31 December 2014) and a liquidity reserve of USD 9.4bn (USD 11.6bn at 31 December 2014) the Group still has a strong financial position and is within its financial policy ratio targets.
| Result for the period – continuing operations |
Gain on sale of non current assets, etc., net |
Impairment losses, net1 |
Tax on adjustments | Underlying result | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD million, Q2 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Maersk Group | 1,086 | 2,304 | 68 | 2,832 | -80 | -1,732 | -1 | 18 | 1,099 | 1,186 |
| Maersk Line | 507 | 547 | 8 | 4 | - | - | - | - | 499 | 543 |
| Maersk Oil | 137 | -1,397 | - | - | -80 | -1,735 | - | 23 | 217 | 315 |
| APM Terminals | 161 | 223 | 2 | 18 | - | - | - | -6 | 159 | 211 |
| Maersk Drilling | 218 | 117 | 29 | - | - | - | - | - | 189 | 117 |
| APM Shipping Services | 138 | 30 | 29 | - | - | 3 | - | 1 | 109 | 27 |
| Maersk Supply Service | 64 | 33 | 31 | - | - | - | - | - | 33 | 33 |
| Maersk Tankers | 35 | -2 | -4 | -2 | - | - | - | 1 | 39 | -1 |
| Damco | 7 | -32 | - | - | - | - | - | - | 7 | -32 |
| Svitzer | 32 | 32 | 2 | 2 | - | 3 | - | - | 30 | 27 |
1 Including the Group's share of impairments, net, recorded in joint ventures and associated companies.
Maersk Line signed a contract for 11 second generation Triple-E vessels with a value of USD 1.7bn to be delivered in 2017-18, and with the option for additionally six vessels. The vessels will have a capacity of 19,630 TEU (twenty-foot equivalent) each.
The new vessels will be the largest in Maersk Line's fleet and are intended for the Asia-Europe service where they will replace smaller, less efficient vessels.
The partners in the Norwegian Johan Sverdrup field have received the ruling from the authorities on the apportionment of the ownership of the field, which increased Maersk Oil's share from 8.12% to 8.44%. Final authority sanctioning of the plan for development and operation is expected in Q3, pending approval by all partners of the revised equity split. The award of major procurement contracts for living quarter top-sides, drilling rig etc. continued during Q2 in accordance with the schedule.
Qatar Petroleum initiated an evaluation process in Q2 for the selection of a partner to undertake the future development of the Al Shaheen field, as the current agreement expires mid-2017. Around 40% of Maersk Oil's total entitlement production came from Al-Shaheen in 2014. Maersk Oil is confident it can offer the state of Qatar a competitive, reliable and unique value proposition for the future development of Al Shaheen given Maersk Oil's extensive technical knowledge of this complex field which has been built over decades in close partnership with Qatar Petroleum. The outcome of the tender process is expected during second half of 2016.
APM Terminals will invest USD 0.8bn in a newbuild container terminal and road infrastructure upgrade next to its present
facility in Tema, Ghana, with 3.5m TEU annual throughput capacity.
The investment will fund the development of a new greenfield joint venture port outside of the present facility, and an upgrade of the roads linking the port to the nation's capital, Accra. The Tema project will result in four deep-water berths, a new breakwater and an access channel able to accommodate the world's largest container ships.
In order to adapt our business to the current substantially lower oil price, cost saving initiatives have been and are being implemented across the Group.
Maersk Oil has launched an extensive cost transformation programme to improve profitability and position Maersk Oil for growth in a lower price environment. Maersk Oil expects to reduce the net operating costs excluding exploration with 10% by the end of 2015 compared to the 2014 baseline. This is in line with the targeted 20% reduction by the end of 2016.
APM Terminals has implemented revenue improvement and cost savings initiatives in each of its terminals contributing more than USD 100m in the first half of 2015.
Since the launch of Maersk Drilling's cost reduction and efficiency enhancement programme in Q4 2014, Maersk Drilling has delivered 5% savings on the operating cost level, excluding positive rate of exchange effects, for the first six months of 2015 vs same period last year through e.g. restructuring of the head office, re-negotiated supplier contracts and enhancement of the operational performance.
Maersk Supply Service initiated early in the year cost saving initiatives which have resulted in sustainable savings across
cost categories, hereunder a reduction in headquarter positions of 15% and improvements of energy efficiency leading to significant savings.
Better use of technology and innovation is critical to maintaining the Group's competitive edge and this will be an important driver for reducing cost as well as enhancing our customer experience.
Maersk Maritime Technology successfully manages a significant portion of the business units' innovation. Furthermore, the Group Innovation Board aims to identify and fund projects which are not directly related to the business units' daily operations.
Maersk Line actively evaluates new technologies for fuel efficiency and prepares for upcoming regulations both as a part of its retrofit programme as well as the recent newbuilding activities. As examples, Maersk Line evaluates suppliers and technologies relative to:
In order to improve decision support and data quality, Maersk Line is also working to improve the fuel consumption measurements on board its vessels. The objective is to increase the transparency and frequency of vessel data to support operational efficiency across the entire fleet.
Maersk Line has begun a journey to modernise its customer interaction in line with the digital age, and the other business units will also benefit from this.
Maersk Oil is seeking to enhance business competitiveness by being good at extracting hydrocarbons from complex reservoirs such as tight chalk reservoirs in the North Sea and high-pressure, high-temperature fields like the Culzean field. An example of this effort is Maersk Oil's and the other DUC partners' investment in the Danish Hydrocarbon Research & Technology Centre, launched in September 2014, where the first major technology programme has been initiated encompassing advanced water flooding of the Dan, Halfdan and Kraka fields. Other focus areas are enhanced reservoir modelling, enhanced oil recovery mechanisms and cost-effective well completions.
In addition, Maersk Oil is protecting own developed technology with patent applications for new inventions, which in 2015 has resulted in patent applications for new methods for improved data and signal transmission in wells.
APM Terminals' new Maasvlakte II facility is the world's first fully-automated and emissions-free, sustainably-powered container terminal. The facility is currently transitioning from its testing phase into normal operation supported by its newly developed equipment, processes and IT systems.
APM Terminals has successfully implemented a new terminal operating system in 12 of its terminals since June 2014. This standard platform across the portfolio provides opportunities to further optimise operational processes and leverage economy of scale for current and future improvements.
Maersk Drilling is designing the next generation drillship that will be critical to unlocking the next frontier of deepwater oil and gas resources. The 20K™rigs will be able to safely and efficiently operate in high-pressure, high-temperature reservoirs up to 20,000 pounds per square inch and 350 degrees Fahrenheit.
Maersk Supply Service is working on a project for online monitoring of lubricating and hydraulic oil condition for critical machinery. The innovation priority is supported by several projects where e.g. automatic greasing of crane wires and development of a flexible chain wheel are being investigated.
Svitzer has developed the 2nd generation ECO tugs' with better eco features, like low-reflection paint to reduce impact on aquatic life, solar-panel heating and on-board water recycling. These are the first purpose-built hybrid tugs in the world with variable speed generators and direct current drive for optimised fuel consumption.
The Maersk Group is actively pursuing investment opportunities within and adjacent to present business areas. The timing is uncertain and depends on fulfilling our return requirement.
on the strategy to become a premium conglomerate based on top-quartile performance in all our business units.
The Group is delivering on its financial ambition of above 10% ROIC over the cycle with a ROIC creation of 12.0% in the first six months of 2015 and 14.3% for the same period in 2014. The Group is focused on active portfolio and performance management, disciplined capital allocation and delivering on its financial strategy.
We reiterate our strategic direction of targeting profitable growth through business optimisation, cost reduction and a strong customer focus to maintain top-quartile performance with a ROIC above 10% over the cycle in all business units. The turbulence in the oil price has had a negative influence in the oil and offshore markets and countries dependent on oil. This has changed the outlook for Maersk Oil, Maersk Drilling, APM Terminals and APM Shipping Services, where previously announced profit and growth targets will be replaced by plans adapting to the volatile environment.
The Group is executing on specific cost and efficiency programmes in all business units in order to improve profitability in the more challenging environment. The valuable experience from previously successfully executed cost saving initiatives lays a solid foundation for these programmes.
The Group is focused on developing its world class businesses and exiting businesses that do not support the future strategy. The most significant divestment being the 18.4% ownership share in Danske Bank and the distribution of an extraordinary dividend in April 2015. The programme of focusing the Group is now complete and the focus on asset profitability will be maintained.
The Group seeks to supplement organic growth with value enhancing acquisitions.
The Group's ambition is to increase the nominal dividend per share over time, supported by underlying earnings growth. The Group's capital structure and liquidity reserve are managed in line with the Group's current Baa1/BBB+ credit rating. The Board has decided to launch the second buy-back programme aiming at buying back shares with a market value of
DKK 6.8bn (equal to approximately USD 1bn) within the coming 12 months.
Maersk Line continues to improve its competitiveness through cost leadership. Maersk Line maintains its medium term ambition of an EBIT margin gap to peers of more than 5% points, which Maersk Line has delivered every quarter since Q4 2012. Maersk Line maintains its ambition to be self-funded, which has been achieved since 2013. Maersk Line adjusts its growth target from growing in line with the market to growing at least with the market to defend its market leading position. Maersk Line is executing on its USD 15bn investment programme announced in September 2014 to support the growth targets. Additionally, Maersk Line adjusts its annual return target from 8.5% ROIC to ROIC between 8.5% and 12.0%.
Maersk Oil is executing on reducing operating expenses by 20% compared to 2014 towards end-2016 in response to the lower oil price. In addition, the level of exploration expenditure has been reduced while acquisitions are being considered in order to grow reserves and production. Maersk Oil progresses on maturation of key projects and has brought the fields Golden Eagle, UK and Jack, US on stream.
APM Terminals will continue to build on its track record for delivering double-digit returns based on disciplined investments in terminals and other port infrastructure, operational efficiencies and portfolio optimisation. APM Terminals aims through investments to grow ahead of the global transportation market.
Maersk Drilling has successfully implemented seven of eight rigs in the newbuild programme with high uptime and good safety performance, but will be challenged by adverse market conditions. The oldest rig in the fleet has been decommissioned for recycling. Maersk Drilling is taking steps to reduce its cost base with a double digit percentage saving by end 2016.
APM Shipping Services is successfully executing on initiatives to improve profitability.
The Group's expectation of an underlying result around USD 4.0bn is unchanged. Gross cash flow used for capital expenditure is now expected to be around USD 8bn in 2015 (USD 8.7bn) from previously around USD 9bn, while cash flow from operating activities is still expected to develop in line with the result.
Group CEO Nils S. Andersen – tel. +45 3363 1912 Group CFO Trond Westlie – tel. +45 3363 3106
Changes in guidance are versus guidance given at Q1 2015. All figures in parenthesis refer to full year 2014.
The Interim Report for Q3 is expected to be announced on 6 November 2015.
Maersk Line reiterates the expectation of a higher underlying result than for 2014 (USD 2.2bn). Global demand for seaborne container transportation is revised to an expected increase by 2-4% versus previously by 3-5%.
Maersk Oil now expects a positive underlying result for 2015 significantly below 2014 (USD 1.0bn) at oil prices in the range 55-60 USD per barrel. The previous expectation was a small positive underlying result. The low oil price is somewhat offset by the effect of cost savings, strong production performance and deferred tax income in the UK.
Maersk Oil's entitlement production is now expected at around 285,000 boepd (251,000 boepd) from previously above 265,000 boepd. The exploration expenses are unchanged expected to be approximately USD 0.7bn (USD 765m) for the year.
APM Terminals revises the expectation for the underlying result to be significantly below 2014 (USD 849m), previously below 2014, due to weaker business climate in oil dependent markets.
Maersk Drilling now expects a significantly higher underlying result than in 2014 (USD 471m), from previously a higher underlying result, due to more rigs in operation, high forward contract coverage as well as impact from the initiated profit optimisation programme.
APM Shipping Services now expects the underlying result for 2015 to be significantly above the 2014 result (USD 185m), from previously above the 2014 result, due to better performance in the first half of 2015.
The Group's guidance for 2015 is subject to considerable uncertainty, not least due to developments in the global economy, the container freight rates and the oil price.
The Group's result depends on a number of factors. Based on the expected earnings level and all other things being equal, the sensitivities on calendar 2015 for four key value drivers are listed in the table below.
| Factors | Change | Effect on the Group's underlying profit rest of year |
|---|---|---|
| Oil price for Maersk Oil | +/-10 USD/barrel | +/-USD 0.16bn |
| Bunker price | +/-100 USD/tonne | -/+USD 0.1bn |
| Container freight rate | +/-100 USD/FFE | +/-USD 0.5bn |
| Container freight volume | +/-100,000 FFE | +/-USD 0.1bn |
AMOUNTS IN USD MILLION
| Q2 | Q2 | 6 months | Full year | ||
|---|---|---|---|---|---|
| INCOME STATEMENT | 2015 | 2014 | 2015 | 2014 | 2014 |
| Revenue | 10,526 | 11,949 | 21,073 | 23,685 | 47,569 |
| Profit before depreciation, amortisation | |||||
| and impairment losses, etc. (EBITDA) | 2,631 | 3,085 | 5,201 | 6,102 | 11,919 |
| Depreciation, amortisation and impairment losses, net | 1,223 | 2,806 | 2,324 | 3,743 | 7,008 |
| Gain on sale of non-current assets, etc., net | 68 | 57 | 343 | 80 | 600 |
| Share of profit/loss in joint ventures | 39 | 41 | 100 | 72 | -6 |
| Share of profit/loss in associated companies | 24 | 156 | 42 | 259 | 412 |
| Profit before financial items (EBIT) | 1,539 | 533 | 3,362 | 2,770 | 5,917 |
| Financial items, net | -80 | -185 | -151 | -339 | -606 |
| Profit before tax | 1,459 | 348 | 3,211 | 2,431 | 5,311 |
| Tax | 373 | 823 | 553 | 1,776 | 2,972 |
| Profit for the period – continuing operations | 1,086 | -475 | 2,658 | 655 | 2,339 |
| Profit for the period – discontinued operations | - | 2,779 | - | 2,856 | 2,856 |
| Profit for the period | 1,086 | 2,304 | 2,658 | 3,511 | 5,195 |
| A.P. Møller - Mærsk A/S' share | 1,069 | 2,250 | 2,608 | 3,400 | 5,015 |
| Total assets | 64,015 | 70,972 | 64,015 | 70,972 | 68,844 |
|---|---|---|---|---|---|
| Total equity | 38,236 | 42,474 | 38,236 | 42,474 | 42,225 |
| Invested capital | 47,303 | 51,941 | 47,303 | 51,941 | 49,927 |
| Net interest-bearing debt | 8,835 | 9,467 | 8,835 | 9,467 | 7,698 |
| Investments in property, plant and equipment | |||||
| and intangible assets | 1,998 | 2,259 | 3,987 | 4,397 | 9,368 |
| Cash flow from operating activities1 | 1,777 | 1,749 | 3,727 | 3,623 | 8,761 |
|---|---|---|---|---|---|
| Cash flow used for capital expenditure1 | 3,075 | -1,401 | 1,432 | -3,249 | -6,173 |
| FINANCIAL RATIOS | |||||
| Return on invested capital after tax (ROIC), annualised | 10.2% | 18.6% | 12.0% | 14.3% | 11.0% |
| Return on equity after tax, annualised | 11.6% | 21.7% | 13.2% | 16.5% | 12.3% |
| Equity ratio | 59.7% | 59.8% | 59.7% | 59.8% | 61.3% |
| Q2 | Q2 | 6 months | Full year | |||
|---|---|---|---|---|---|---|
| STOCK MARKET RATIOS | 2015 | 2014 | 2015 2014 |
2014 | ||
| Earnings per share (EPS), USD | 49 | 103 | 121 | 156 | 230 | |
| Diluted earnings per share, USD | 49 | 102 | 121 | 155 | 230 | |
| Cash flow from operating activities per share, USD1 | 83 | 80 | 174 | 166 | 401 | |
| Share price (B share), end of period, DKK | 12,120 | 13,533 | 12,120 | 13,533 | 12,370 | |
| Share price (B share), end of period, USD | 1,818 | 2,479 | 1,818 | 2,479 | 2,021 | |
| Total market capitalisation, end of period, USD m | 38,403 | 52,761 | 38,403 | 52,761 | 42,848 |
| Maersk Line | |||||
|---|---|---|---|---|---|
| Transported volumes (FFE in '000) | 2,484 | 2,396 | 4,691 | 4,639 | 9,442 |
| Average freight rate (USD per FFE) | 2,261 | 2,634 | 2,370 | 2,631 | 2,630 |
| Unit cost (USD per FFE incl. VSA income) | 2,246 | 2,585 | 2,342 | 2,598 | 2,584 |
| Average bunker price (USD per tonne) | 335 | 579 | 346 | 580 | 562 |
| Maersk Line fleet, owned | 278 | 271 | 274 | ||
| Maersk Line fleet, chartered | 341 | 306 | 336 | ||
| Fleet capacity (TEU, '000) | 3,077 | 2,763 | 2,946 | ||
| Maersk Oil | |||||
| Average share of oil and gas production | |||||
| (thousand barrels of oil equivalent per day) | 306 | 235 | 305 | 245 | 251 |
| Average crude oil price (Brent) (USD per barrel) | 62 | 110 | 58 | 109 | 99 |
| APM Terminals | |||||
| Containers handled (measured in million TEU | |||||
| and weighted with ownership share) | 9.2 | 9.8 | 18.3 | 19.2 | 38.3 |
| Number of terminals | 65 | 66 | 64 | ||
| Maersk Drilling | |||||
| Operational uptime | 97% | 97% | 97% | 97% | 97% |
| Contracted days | 1,671 | 1,456 | 3,471 | 2,896 | 6,275 |
| Revenue backlog (USD bn) | 5.3 | 7.0 | 6.0 | ||
1 Figures for 2014 relate only to continuing operations.
The interim consolidated financial statements are prepared in accordance with IAS 34. Discontinued operations comprise Dansk Supermarked Group.
| Invested capital 30 June |
ROIC, annualised Q2 |
ROIC, annualised 6 months |
||||
|---|---|---|---|---|---|---|
| 2015 | USD million 2014 |
2015 | 2014 | 2015 | 2014 | |
| MAERSK GROUP | 47,303 | 51,941 | 10.2% | 18.6% | 12.0% | 14.3% |
| MAERSK LINE | 20,340 | 20,176 | 10.1% | 10.8% | 12.2% | 9.9% |
| MAERSK OIL | 5,962 | 5,007 | 9.2% | -96.6% | 11.9% | -34.2% |
| APM TERMINALS | 5,995 | 6,384 | 10.9% | 14.2% | 11.9% | 14.1% |
| MAERSK DRILLING | 8,246 | 6,695 | 10.6% | 7.2% | 9.6% | 7.6% |
| APM SHIPPING SERVICES | 4,679 | 5,440 | 11.8% | 2.1% | 9.9% | 3.7% |
| Maersk Supply Service | 1,699 | 1,662 | 15.2% | 7.8% | 12.0% | 6.8% |
| Maersk Tankers | 1,580 | 1,754 | 8.9% | -0.5% | 9.0% | 2.4% |
| Damco | 286 | 514 | 8.9% | -25.8% | -1.5% | -18.0% |
| Svitzer | 1,114 | 1,510 | 11.6% | 8.5% | 11.3% | 9.0% |
Maersk Line / Maersk Oil / APM Terminals / Maersk Drilling / APM Shipping Services Maersk Group performance for the first six months of 2015 / Statement of the Board of Directors and Management / Independent Auditors' Review Report
MAERSK LINE Maersk Line reported a profit of USD 507m (USD 547m) and an underlying profit of USD 499m (USD 543m). Despite a sharp decline in the average freight rate of 14.1%, Maersk Line delivered a 10.1% (10.8%) ROIC based on its cost leadership strategy.
Revenue of USD 6.3bn was 9.2% lower than Q2 2014, primarily driven by the decline in the average freight rate to 2,261 USD/ FFE only partly offset by a volume increase of 3.7% to 2,484k FFE. The freight rate decline was largely attributable to bunker cost savings being passed through to the customers and to deteriorating market conditions on the Asia-Europe trade. Recognised freight revenue was USD 5.6bn (USD 6.3bn) and other revenue USD 617m (USD 612m).
Global container demand is expected to have grown between 1-2% in Q2 2015 compared to Q2 2014. The soft market development was primarily due to weak imports into Europe.
Estimated EBIT-margin gap to peers was at 6.8%-points in Q1 2015. This remains consistent with Maersk Line's ambition to sustain a gap over it's peers above 5%-points.
Unit cost decreased by 13.1% to 2,246 USD/FFE benefitting from decreased bunker prices and the USD appreciation. Bunker cost decreased 40.1% compared to Q2 2014. Bunker efficiency remained on par with last year at 902 kg/FFE (903 kg/FFE).
| USD MILLION | ||||
|---|---|---|---|---|
| Q2 | Q2 | 6 months | ||
| MAERSK LINE HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 |
| Revenue | 6,263 | 6,902 | 12,517 | 13,365 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) | 998 | 1,024 | 2,200 | 1,886 |
| Depreciation, amortisation and impairment losses, net | 476 | 461 | 945 | 836 |
| Gain on sale of non-current assets, etc., net | 8 | 4 | 12 | 20 |
| Share of profit/loss in associated companies | - | - | -1 | - |
| Profit/loss before financial items (EBIT) | 530 | 567 | 1,266 | 1,070 |
| Tax | 23 | 20 | 45 | 69 |
| Net operating profit/loss after tax (NOPAT) | 507 | 547 | 1,221 | 1,001 |
| Cash flow from operating activities | 873 | 870 | 1,844 | 1,583 |
| Cash flow used for capital expenditure | -861 | -488 | -1,063 | -856 |
| Invested capital | 20,340 | 20,176 | 20,340 | 20,176 |
| ROIC, annualised | 10.1% | 10.8% | 12.2% | 9.9% |
| Transported volumes (FFE in '000) | 2,484 | 2,396 | 4,691 | 4,639 |
| Average freight rate (USD per FFE) | 2,261 | 2,634 | 2,370 | 2,631 |
| Unit cost (USD per FFE incl. VSA income) | 2,246 | 2,585 | 2,342 | 2,598 |
| Average bunker price (USD per tonne) | 335 | 579 | 346 | 580 |
| Maersk Line fleet, owned | 278 | 271 | ||
| Maersk Line fleet, chartered | 341 | 306 | ||
| Fleet capacity (TEU in '000) | 3,077 | 2,763 | ||
Cash flow from operating activities was USD 873m (USD 870m) and cash flow used for capital expenditure was USD 861m (USD 488m) leaving a free cash flow of USD 12m (USD 382m). The high capital expenditure in Q2 2015 was mainly due to delivery of the last five of the 20 first generation Triple-E vessels.
By the end of Q2, the Maersk Line fleet consisted of 278 owned vessels (1.8m TEU) and 341 chartered vessels (1.3m TEU) with a total capacity of 3.1m TEU. The before mentioned last five first generation Triple-E vessels have a capacity of 90,000 TEU.
Maersk Line signed a contract for delivery of 11 second gener ation Triple-E vessels with a capacity of 19,630 TEU each and with an option for six vessels more, at the beginning of June. Delivery is scheduled to take place in 2017-18.
Maersk Line's nominal fleet capacity increased by 5.0% and the average vessel size increased by 3.2% compared to Q1 2015. Compared to Q2 2014 the nominal fleet capacity has increased by 11.3%. Idle capacity at the end of Q2 was 10,000 TEU (three vessels) versus 19,000 TEU (four vessels) at the end of Q2 2014. Maersk Line's idle capacity corresponds to around 3% of total idle capacity in the market.
The global container fleet has grown by 8% compared to Q2 2014 and at the end of Q2 2015 it stood at around 19m TEU of which 2% were idle. Deliveries amounted to 465,000 TEU (51 vessels) and 27,000 TEU (19 vessels) were scrapped during Q2 2015. During the same period 735,000 TEU (60 vessels) of new capacity were ordered, lifting the order book to around 21% of the fleet (Alphaliner ) .
MAERSK LINE Maersk Line is enabling trade in Lagos, Nigeria.
MAERSK OIL Maersk Oil made a profit of USD 137m (loss of USD 1.4bn, adversely impacted by USD 1.7bn impairment on Brazilian assets) with an underlying profit of USD 217m (USD 315m). ROIC was 9.2% (negative 96.6%). The result was positively impacted by increased production, lower costs due to the cost transformation programme and lower exploration costs but negatively impacted mainly by the lower oil price and USD 80m impairment from relinquishing Iraqi (Kurdistan) licenses.
The entitlement production increased by 30% to 306,000 boepd (235,000 boepd) at a 44% lower average oil price of USD 62 per barrel. The increased production was a result of a higher share
of production from Qatar due to the lower oil price as well as improved operational performance and production from new projects, in particular in the UK.
As a response to the lower oil price, Maersk Oil has initiated a number of activities to improve profitability and position Maersk Oil for growth. The current asset portfolio is being evaluated and costs are being reviewed across all categories, both internal and from subcontractors. Maersk Oil expects that the net operating costs excluding exploration will be reduced with 10% by the end of 2015 compared to the 2014 baseline. This is in line with the targeted 20% reduction by the end of 2016.
| USD MILLION | ||||
|---|---|---|---|---|
| Q2 | Q2 | 6 months | ||
| MAERSK OIL HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 |
| Revenue | 1,583 | 2,272 | 3,016 | 4,720 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) | 849 | 1,441 | 1,439 | 2,980 |
| Depreciation, amortisation and impairment losses, net | 440 | 2,101 | 751 | 2,420 |
| Gain on sale of non-current assets, etc., net | - | - | 3 | - |
| Share of profit/loss in associated companies | - | -2 | - | -5 |
| Profit/loss before financial items (EBIT) | 409 | -662 | 691 | 555 |
| Tax | 272 | 735 | 346 | 1,606 |
| Net operating profit/loss after tax (NOPAT) | 137 | -1,397 | 345 | -1,051 |
| Cash flow from operating activities | 611 | 718 | 716 | 1,452 |
| Cash flow used for capital expenditure | -502 | -546 | -996 | -1,025 |
| Invested capital | 5,962 | 5,007 | 5,962 | 5,007 |
| ROIC, annualised | 9.2% | -96.6% | 11.9% | -34.2% |
| Exploration costs | 109 | 172 | 271 | 345 |
| Average share of oil and gas production (thousand barrels of oil equivalent per day) | 306 | 235 | 305 | 245 |
| Average crude oil price (Brent) (USD per barrel) | 62 | 110 | 58 | 109 |
Exploration costs were USD 109m (USD 172m) with the completion of three (three) exploration/appraisal wells. Maersk Oil continues to evaluate the costs and benefits of its exploration activities given the oil price expectations.
The decrease in tax of USD 463m to USD 272m was mainly due to lower current tax related to Denmark, Qatar and Algeria because of the lower average oil price.
Cash flow from operating activities was USD 611m (USD 718m); lower than last year mainly due to the lower oil price. Cash flow used for capital expenditure was USD 502m (USD 546m).
The increased entitlement production was a result of a higher production share in Qatar where the decreased oil price gives more barrels for cost recovery as well as strong operational
performance in particular in the UK and production from the new fields Golden Eagle in the UK and Jack in the US.
The development project at the Al Shaheen field offshore Qatar is progressing as planned. Maersk Oil Qatar is now more than half way through the drilling programme planned to reach a total of 50 wells.
A plan for development and operation at a cost level of USD 1.8bn (Maersk Oil's share) for the Johan Sverdrup field offshore Norway was submitted in Q1 2015 and final sanctioning by authorities is expected in Q3, pending approval by all partners of the revised equity split from the authorities, which increased Maersk Oil's share from 8.12% to 8.44%.
The high-pressure, high-temperature Culzean gas field offshore the UK reached internal project approval in June 2015. Partner
approval was received in July 2015 and sanction from the authorities is expected in the second half of 2015.
In Angola, the Chissonga project remains challenged due to the low oil price. Negotiations with authorities, partners and contractors are ongoing to make the project viable.
Three exploration wells were completed in Kurdistan, Kazakhstan and Denmark. Two of the wells, the Kurdish Swara Tika East well and the Danish Xana well discovered hydrocarbons and potential commercial developments are being assessed. The third well, located in Kazakhstan, came out dry.
In Brazil, Itaipu and Wahoo are under commercial evaluation. Decision of extension of exploration license or field development is expected by the end of 2015.
APM Terminals delivered a profit of USD 161m (USD 223m) and a ROIC of 10.9% (14.2%). The underlying profit was USD 159m (USD 211m). The result was negatively impacted by a revenue reduction of 8.6% caused by decreased volumes in key oil dependent markets as well as divestments in 2014 and weakening of local currencies against the USD resulting in lower revenue in USD terms.
The number of containers handled by APM Terminals (weighted with APM Terminals' ownership interest) decreased by 6% compared to 2014, reaching 9.2m TEU (9.8m TEU). This was impacted by the divestment of APM Terminals Virginia, Portsmouth, USA and Terminal Porte Océane S.A. Le Havre, France during Q3 2014. Excluding these, like-for-like volumes decreased by
3.5% in Q2, whereas the overall global container market grew approximately by 4.3% in Q2 (Drewry).
The lower oil price resulted in significantly less import volumes in West Africa and Russia, which was partially offset by volume ramp up in Santos, Brazil. Revenue improvement and cost savings initiatives have been implemented across the global portfolio successfully delivering improvements of more than USD 100m in the first half of 2015, however the impact from the adverse market conditions was only partly mitigated.
The share of profit from joint venture and associate companies remained in line with last year at USD 54m (USD 53m).
| USD MILLION | ||||
|---|---|---|---|---|
| Q2 | Q2 | 6 months | ||
| APM TERMINALS HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 |
| Revenue | 1,033 | 1,130 | 2,169 | 2,222 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) | 206 | 260 | 426 | 525 |
| Depreciation, amortisation and impairment losses, net | 77 | 73 | 147 | 145 |
| Gain on sale of non-current assets, etc., net | 2 | 18 | 10 | 16 |
| Share of profit/loss in joint ventures | 32 | 28 | 71 | 47 |
| Share of profit/loss in associated companies | 22 | 25 | 42 | 45 |
| Profit/loss before financial items (EBIT) | 185 | 258 | 402 | 488 |
| Tax | 24 | 35 | 51 | 50 |
| Net operating profit/loss after tax (NOPAT) | 161 | 223 | 351 | 438 |
| Cash flow from operating activities | 176 | 192 | 447 | 497 |
| Cash flow used for capital expenditure | -169 | -215 | -391 | -335 |
| Invested capital | 5,995 | 6,384 | 5,995 | 6,384 |
| ROIC, annualised | 10.9% | 14.2% | 11.9% | 14.1% |
| Containers handled (measured in million TEU and weighted with ownership share) | 9.2 | 9.8 | 18.3 | 19.2 |
| Number of terminals | 65 | 66 | ||
Although certain tax incentives have expired since Q2 2014, the effective tax rate decreased to 12.4% (13.9%) due to lower profits in terminals with a relatively high tax rate.
Cash flow from operating activities of USD 176m (USD 192m) developed in line with the operational results. Cash flow used for capital expenditure in the quarter decreased from USD 215m in Q2 2014 to USD 169m in Q2 2015.
APM TERMINALS An operator at work at APM Terminals' Pier 400 in Los Angeles.
Maersk Drilling delivered a profit of USD 218m (USD 117m) generating a ROIC of 10.6% (7.2%), positively impacted by general cost savings, fleet growth and an additional gain of USD 29m relating to the divestment of Maersk Drilling's activities in Venezuela in 2014, but partly offset by three rigs off contract. The underlying profit was USD 189m (USD 117m).
The economic utilisation of the fleet was 85% (91%) adversely impacted by three rigs being idle, however benefitting from no yard stay/upgrade projects in the quarter compared to same quarter last year. The average operational uptime was 98% (97%) for the jack-up rigs and 96% (95%) for the floating rigs.
At the end of Q2 2015, Maersk Drilling's forward contract coverage was 83% for the remaining part of 2015, 61% for 2016 and 32% for 2017. The total revenue backlog by the end of Q2 2015 amounted to USD 5.3bn (USD 7.0bn).
Operating costs increased due to newbuilds that started operation during the last five quarters partly offset by the divestment of the Venezuela business in Q3 2014. Furthermore, the initiated cost reduction and efficiency enhancement programme, excluding positive rate of exchange effects, delivered a saving of 5% on the operating cost level compared to Q2 2014.
The increased cash flow from operating activities of USD 248m (USD 173m) was mainly related to six additional rigs in operation and no yard stay/upgrade projects in Q2. Cash flow used for capital expenditures declined to USD 45m (USD 478m) mainly due to fewer instalments paid for the newbuild projects.
| USD MILLION | ||||
|---|---|---|---|---|
| Q2 | Q2 | 6 months | ||
| MAERSK DRILLING HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 |
| Revenue | 624 | 465 | 1,254 | 942 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) | 361 | 214 | 704 | 390 |
| Depreciation, amortisation and impairment losses, net | 118 | 62 | 259 | 121 |
| Gain on sale of non-current assets, etc., net | 29 | - | 29 | 9 |
| Share of profit/loss in joint ventures | -5 | -2 | 8 | 1 |
| Profit/loss before financial items (EBIT) | 267 | 150 | 482 | 279 |
| Tax | 49 | 33 | 96 | 46 |
| Net operating profit/loss after tax (NOPAT) | 218 | 117 | 386 | 233 |
| Cash flow from operating activities | 248 | 173 | 528 | 252 |
| Cash flow used for capital expenditure | -45 | -478 | -731 | -1,330 |
| Invested capital | 8,246 | 6,695 | 8,246 | 6,695 |
| ROIC, annualised | 10.6% | 7.2% | 9.6% | 7.6% |
| Operational uptime | 97% | 97% | 97% | 97% |
| Contracted days | 1,671 | 1,456 | 3,471 | 2,896 |
| Revenue backlog (USD bn) | 5.3 | 7.0 | ||
A short term contract was signed for the ultra deepwater drillship Maersk Venturer during Q2 2015.
| Segment | 2015 ROY | 2016 |
|---|---|---|
| Ultra-harsh environment jack-up rigs (Norway) | 85% | 68% |
| Premium jack-up rigs | 79% | 47% |
| Ultra deepwater and midwater rigs | 85% | 61% |
| Total | 83% | 61% |
Revenue backlog, end Q2 2015
USD bn
APM Shipping Services made a profit of USD 138m (USD 30m) and a ROIC of 11.8% (2.1%). The underlying profit was USD 109m (USD 27m).
Maersk Supply Service reported a profit of USD 64m (USD 33m) and a ROIC of 15.2% (7.8%). The underlying profit was USD 33m (USD 33m).
The profit was positively impacted by a gain of USD 31m from the sale of a vessel. Additionally currency development and improvement of operational costs contributes with USD 23m, where lower crew costs and lower repair and maintenance costs were the primary elements. This was partly offset by lower revenue of USD 19m due to a combination of lower rates, lower utilisation and divestments.
Contract coverage for the remainder of 2015 is 54%, and 37% for 2016.
Cash flow used for capital expenditure decreased to USD 0m (USD 17m) mainly due to the sale of two vessels during the
quarter. Cash flow from operations of USD 69m was on par with last year (USD 71m).
Maersk Tankers made a profit of USD 35m (loss of USD 2m) and a ROIC of 8.9% (negative 0.5%). The underlying profit was USD 39m (loss of USD 1m).
The result was positively impacted by cost saving initiatives reducing the vessel operating cost by 7% and improved rates across all the product segments due to increased demand in the market for transportation of refined oil products. The EBITDA in Q2 was USD 43m higher than same period last year.
The reduction in revenue was mainly due to the divestment of the VLCC segment, offset by improved rates in the product segments.
| USD MILLION | ||||
|---|---|---|---|---|
| Q2 | Q2 | 6 months | ||
| APM SHIPPING SERVICES HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 |
| Revenue | 1,234 | 1,456 | 2,553 | 2,935 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) | 214 | 129 | 412 | 309 |
| Depreciation, amortisation and impairment losses, net | 97 | 94 | 194 | 195 |
| Gain on sale of non-current assets, etc., net | 29 | - | 32 | 1 |
| Share of profit/loss in joint ventures | 8 | 11 | 14 | 18 |
| Profit/loss before financial items (EBIT) | 154 | 46 | 264 | 133 |
| Tax | 16 | 16 | 32 | 28 |
| Net operating profit/loss after tax (NOPAT) | 138 | 30 | 232 | 105 |
| Cash flow from operating activities | 193 | 111 | 353 | 212 |
| Cash flow used for capital expenditure | -82 | 339 | -177 | 284 |
| Invested capital | 4,679 | 5,440 | 4,679 | 5,440 |
| ROIC, annualised | 11.8% | 2.1% | 9.9% | 3.7% |
Cash flow from operating activities was USD 55m (USD 83m), positively impacted by improved operating margin and reduction in net working capital, offset by the lower activity from the reduced fleet. Cash flow from capital expenditures was USD 21m (positive USD 423m). Q2 2014 was positively impacted by the divestment of the VLCC segment.
The first out of ten MR newbuildings, Maersk Tacoma, was delivered in April 2015 and the second, Maersk Tampa, was delivered in July. Of the remaining eight newbuildings, seven will be delivered during 2016 and the last in 2017.
Damco made a profit of USD 7m (loss of USD 32m) and a ROIC of 8.9% (negative 25.8%). The underlying profit was also USD 7m (loss of USD 32m).
Revenue was USD 655m (USD 785m) down 17%, with approximately half of the drop caused by rate of exchange movements. Volumes grew by 8% in the supply chain management product. Controlled ocean freight volumes fell by 7%, partly due to de-selection of non profitable business. Airfreight volumes decreased by 4%, due to non-repeated project cargo in 2014. Although lower than last year, margins improved slightly for airfreight while margins for ocean freight and supply chain management remained in line with prior year period.
The restructuring efforts carried out in 2014 have driven productivity improvements and reduced overhead cost, which positively impacted the quarterly result. For the remainder of 2015 focus is on driving commercial competitiveness and generating profitable and sustainable top-line growth.
Cash flow from operating activities was positive USD 20m (negative USD 71m) due to the improved operational result and reduced working capital.
| USD MILLION | ||||||||
|---|---|---|---|---|---|---|---|---|
| MAERSK SUPPLY SERVICE | MAERSK TANKERS | DAMCO | SVITZER | |||||
| Q2 HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Revenue | 157 | 176 | 260 | 285 | 655 | 785 | 161 | 212 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) |
73 | 69 | 74 | 31 | 17 | -19 | 50 | 46 |
| Depreciation, amortisation and impairment losses, net |
35 | 34 | 34 | 32 | 7 | 7 | 21 | 20 |
| Gain on sale of non-current assets, etc., net | 31 | - | -4 | -2 | - | - | 2 | 2 |
| Share of profit/loss in joint ventures | - | - | - | - | 3 | 2 | 5 | 9 |
| Profit/loss before financial items (EBIT) | 69 | 35 | 36 | -3 | 13 | -24 | 36 | 37 |
| Tax | 5 | 2 | 1 | +1 | 6 | 8 | 4 | 5 |
| Net operating profit/loss after tax (NOPAT) | 64 | 33 | 35 | -2 | 7 | -32 | 32 | 32 |
| Cash flow from operating activities | 69 | 71 | 55 | 83 | 20 | -71 | 49 | 28 |
| Cash flow used for capital expenditure | - | -17 | -21 | 423 | -1 | -23 | -60 | -45 |
| Invested capital | 1,699 | 1,662 | 1,580 | 1,754 | 286 | 514 | 1,114 | 1,510 |
| ROIC, annualised | 15.2% | 7.8% | 8.9% | -0.5% | 8.9% | -25.8% | 11.6% | 8.5% |
| USD MILLION | ||||||||
|---|---|---|---|---|---|---|---|---|
| MAERSK SUPPLY SERVICE | MAERSK TANKERS | DAMCO | SVITZER | |||||
| 6 MONTHS HIGHLIGHTS | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Revenue | 340 | 351 | 536 | 623 | 1,338 | 1,534 | 339 | 429 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. (EBITDA) |
152 | 131 | 142 | 96 | 18 | -18 | 100 | 99 |
| Depreciation, amortisation and impairment losses, net |
70 | 69 | 68 | 69 | 14 | 16 | 42 | 40 |
| Gain on sale of non-current assets, etc., net | 29 | - | -2 | -2 | 2 | - | 3 | 3 |
| Share of profit/loss in joint ventures | - | 1 | - | - | 4 | 4 | 10 | 13 |
| Profit/loss before financial items (EBIT) | 111 | 63 | 72 | 25 | 10 | -30 | 71 | 75 |
| Tax | 9 | 6 | 1 | +1 | 12 | 12 | 10 | 10 |
| Net operating profit/loss after tax (NOPAT) | 102 | 57 | 71 | 26 | -2 | -42 | 61 | 65 |
| Cash flow from operating activities | 107 | 149 | 131 | 120 | 32 | -133 | 83 | 76 |
| Cash flow used for capital expenditure | -17 | -51 | -55 | 484 | - | -28 | -105 | -122 |
| Invested capital | 1,699 | 1,662 | 1,580 | 1,754 | 286 | 514 | 1,114 | 1,510 |
| ROIC, annualised | 12.0% | 6.8% | 9.0% | 2.4% | -1.5% | -18.0% | 11.3% | 9.0% |
Svitzer made a profit of USD 32m (USD 32m) and a ROIC of 11.6% (8.5%). The underlying profit was USD 30m (USD 27m).
Revenue decreased by USD 51m compared to same period last year as a result of a substantially stronger USD, and because salvage revenue was excluded after the salvage activities were merged into a new company named Ardent on 1 May 2015.
Svitzer improved its operating margins and ROIC in harbour towage compared to Q2 2014 through pricing, productivity and cost saving initiatives, despite facing industry overcapacity in Europe and Australia, and a slowdown in the bulk trades.
Cost was USD 111m (USD 166m), with decrease seen primarily from cost saving initiatives and lower salvage activity.
End of May, Svitzer acquired the Brazilian towage operator Transmar thereby entering the sizeable Brazilian towage market.
Cash flow from operating activities increased to USD 49m (USD 28m) driven by higher operating result. Cash flow from investing activities increased to USD 60m (USD 45m) due to investments in the fleet to support new projects.
Following a good start to 2015 in Q1 the Maersk Group delivered a profit in Q2 of USD 1.1bn (USD 2.3bn) giving a profit for the first six months of USD 2.7bn (USD 3.5bn). The profit last year was positively impacted by a USD 2.8bn gain from the sale of the majority share of Dansk Supermarked Group partly offset by the impairment of USD 1.7bn on Brazilian oil assets. The Group's ROIC was 12.0% (14.3%).The underlying profit was USD 2.4bn (USD 2.3bn).
Revenue decreased to USD 21.1bn (USD 23.7bn), predominantly due to lower oil price and lower average container freight rates. The operating expenses decreased by USD 1.7bn mainly due to lower bunker prices and the decrease in tax by USD 1.2bn was primarily a result of the lower oil price.
Cash flow from continuing operating activities was USD 3.7bn (USD 3.6bn) while cash flow used for capital expenditure was
USD 3.5bn (USD 3.2bn), excluding the sale of shares in Danske Bank of USD 4.9bn including dividend received in Q1.
Net interest-bearing debt was USD 8.8bn (USD 7.7bn at 31 December 2014). Total equity was USD 38.2bn (USD 42.2bn at 31 December 2014) positively affected by the profit for the period of USD 2.7bn and negatively affected by the ordinary dividend of USD 1.0bn and the extraordinary dividend of USD 5.2bn.
Maersk Line made a profit of USD 1.2bn (USD 1.0bn) and a ROIC of 12.2% (9.9%). The underlying profit was USD 1.2bn (USD 909m). The improvement in the financial performance was achieved through lower costs including the benefit of lower bunker prices and despite significant pressure on freight rates especially in Q2 2015. Volume increased by 1.1% to 4,691k FFE and average freight rate declined by 9.9% to 2,370 USD/FFE.
| Result for the period – continuing operations |
Gain on sale of non current assets, etc., net |
Impairment losses, net1 |
Tax on adjustments | Underlying result | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD million, 6 months | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Maersk Group | 2,658 | 3,511 | 343 | 2,855 | -100 | -1,664 | -3 | 16 | 2,418 | 2,304 |
| Maersk Line | 1,221 | 1,001 | 12 | 20 | - | 72 | - | - | 1,209 | 909 |
| Maersk Oil | 345 | -1,051 | 3 | - | -80 | -1,735 | -2 | 23 | 424 | 661 |
| APM Terminals | 351 | 438 | 10 | 16 | 7 | - | - | -5 | 334 | 427 |
| Maersk Drilling | 386 | 233 | 29 | 9 | -27 | - | - | -2 | 384 | 226 |
| APM Shipping Services | 232 | 105 | 32 | 1 | - | -1 | - | 1 | 200 | 105 |
| Maersk Supply Service | 102 | 57 | 29 | - | - | - | - | - | 73 | 57 |
| Maersk Tankers | 71 | 26 | -2 | -2 | - | -4 | - | 1 | 73 | 31 |
| Damco | -2 | -42 | 2 | - | - | - | - | - | -4 | -42 |
| Svitzer | 61 | 65 | 3 | 3 | - | 3 | - | - | 58 | 59 |
1 Including the Group's share of impairments, net, recorded in joint ventures and associated companies.
Cash flow from operating activities was USD 1.8bn (USD 1.6bn) and cash flow used for capital expenditure was USD 1.1bn (USD 856m) leaving a free cash flow of USD 781m (USD 727m).
Maersk Oil made a profit of USD 345m (loss of USD 1.1bn after impairment on Brazilian assets). The underlying profit was USD 424m (USD 661m) negatively impacted by 47% lower average oil prices but positively impacted by a higher average entitlement production of 305,000 boepd (245,000 boepd), deferred tax income of USD 170m due to reduction of the UK tax rate, lower costs due to the cost transformation programme and lower exploration costs.
The increased entitlement production was a result of a higher production share in Qatar where the decreased oil price gives more barrels for cost recovery as well as strong operational performance in particular in the UK and production from the new fields Golden Eagle in the UK and Jack in the US.
Maersk Oil completed six (six) exploration/appraisal wells; including the East Swara Tika well in Iraq, Kurdistan, the Drumtochty well in the UK, and the Xana well in Denmark. These three wells discovered hydrocarbons and commercial viability is being assessed. Three wells were assessed not to be commercially viable.
Cash flow from operating activities was USD 716m, 51% lower than last year mainly due to the lower oil price. Cash flow used for capital expenditure was in line with last year at USD 996m (USD 1.0bn).
APM Terminals made a profit of USD 351m (USD 438m) and a ROIC of 11.9% (14.1%). The underlying profit was USD 334m (USD 427m). Volumes decreased by 4.7% compared to 2014, reaching 18.3m TEU (19.2m TEU). The decrease was due to divestments of APM Terminals Virginia, Portsmouth, USA
and Terminal Porte Océane S.A. Le Havre, France during Q3 2014. Excluding these, like-for-like volumes decreased by 1.9%, whereas the overall global container market grew by 4.2% (Drewry). The main reason for lower volume stems from key oil dependent markets, where the impact of low oil prices deteriorated local economic conditions.
Cash flow from operating activities was USD 447m (USD 497m) and cash flow used for capital expenditure was USD 391m (USD 335m).
Maersk Drilling made a profit of USD 386m (USD 233m) positively impacted by fleet growth but offset by three rigs being idle. ROIC was 9.6% (7.6%). The underlying profit was USD 384m (USD 226m).
Maersk Drilling has taken delivery of one ultra harsh environment jack-up rig, Maersk Integrator and one ultra deepwater drillship Maersk Voyager during the first half year. Since the launch of Maersk Drilling's cost reduction and efficiency enhancement programme in Q4 2014, Maersk Drilling has delivered a 5% savings on the operating cost level, excluding positive rate of exchange effects, for the first six months of 2015 compared to the same period last year.
Cash flow from operating activities was USD 528m (USD 252m) and cash flow used for capital expenditure was USD 731m (USD 1.3bn) mainly due to fewer instalments paid for the newbuild projects.
APM Shipping Services made a profit of USD 232m (USD 105m) and a ROIC of 9.9% (3.7%). The improvement came predominantly from result improvement efforts in Maersk Supply Service with a profit of USD 102m (USD 57m), Maersk Tankers with a profit of USD 71m (USD 26m) and Damco improving from a loss of USD 42m in 2014 to a loss of USD 2m.
The sale of Danske Bank shares was finalised in Q1 with 85% ordered by A.P. Møller Holding A/S and 7% by other shareholders, at an offer price of DKK 177.27 per Danske Bank share. The Group's retained 1.6% ownership in Danske Bank is classified as held for trading.
The ordinary dividend of DKK 300 as well as the extraordinary cash dividend equal to DKK 1,671 per A.P. Møller - Mærsk A/S share of nominally DKK 1,000 (in total equal to USD 6.2bn) declared at the Annual General Meeting 30 March 2015 was paid on 7 April 2015.
As part of the share buy-back programme 86,500 A-shares and 346,118 B-shares were cancelled in Q2 in accordance with the decision at the Annual General Meeting on 30 March 2015.
Other businesses made a profit of USD 245m (USD 283m). 2015 includes primarily the gain from the sale of shares in Danske Bank A/S of USD 223m, while 2014 primarily included the Group's share of profit in Danske Bank of USD 249m as well as the gain from the sale of Danbor of USD 23m.
Unallocated activities comprise revenue and cost, etc. which is not attributed to reportable segments, including purchase of bunker and lubricating oil on behalf of companies in the Group as well as financial items. The financial items were negative by USD 151m (USD 339m); the decrease in the net financial expenses was primarily driven by lower interest expenses due to lower debt and interest rates as well as value adjustment on Danske Bank shares and currency adjustments.
The Board of Directors and the Management have today discussed and approved the interim report of A.P. Møller - Mærsk A/S for the period 1 January 2015 to 30 June 2015.
The interim consolidated financial statements of the A.P. Moller - Maersk Group have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and Danish disclosure requirements for listed companies. In our opinion the interim consolidated financial statements (pages 27-41) give a true and fair view of the Group's assets, liabilities and financial position at 30 June 2015 and of the result of the Group's operations and cash flows for the period 1 January to 30 June 2015. Furthermore, in our opinion the Directors' report (pages 3-23) includes a fair review of the development in the Group's operations and financial conditions, the result for the period, cash flows and financial position as well as the most significant risks and uncertainty factors that the Group faces.
Copenhagen, 13 August 2015
Nils S. Andersen — Group CEO
Kim Fejfer
Claus V. Hemmingsen
Søren Skou
Jakob Thomasen
Trond Westlie
Michael Pram Rasmussen — Chairman
Niels Jacobsen — Vice chairman
Ane Mærsk Mc-Kinney Uggla — Vice chairman
Dorothee Blessing
Sir John Bond
Niels B. Christiansen
Renata Frolova
Arne Karlsson
Jan Leschly
Palle Vestergaard Rasmussen
Robert Routs
Robert Mærsk Uggla
We have reviewed the interim consolidated financial statements of A.P. Møller - Mærsk A/S for the period 1 January 2015 – 30 June 2015 comprising condensed income statement, condensed statement of comprehensive income, condensed balance sheet, condensed cash flow statement and condensed statement of changes in equity as well as selected explanatory notes, including summary of significant accounting policies.
The Board of Directors and the Management are responsible for the preparation of interim consolidated financial statements in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim financial reporting of listed companies, and for such internal control as management determines is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express a conclusion on the interim consolidated financial statements based on our review. We conducted our review in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity and additional requirements under Danish Auditor regulation. This requires us to conclude whether anything has come to our attention that causes us to believe that the interim consolidated financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This also requires us to comply with ethical requirements.
A review of interim consolidated financial statements in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity is a limited assurance engagement. The auditor performs procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.
The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on the interim consolidated financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements for the period 1 January 2015 – 30 June 2015 are not prepared in all material respects in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim financial reporting of listed companies.
Copenhagen, 13 August 2015
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
State Authorised Public Accountant
KPMG Statsautoriseret Revisionspartnerselskab
Henrik O. Larsen
State Authorised Public Accountant
(In parenthesis the corresponding figures for 2014)
Interim consolidated financial statements Q2 2015
Condensed income statement / Condensed statement of comprehensive income / Condensed balance sheet at 30 June Condensed cash flow statement / Condensed statement of changes in equity / Notes to the consolidated financial statements
| Q2 | Q2 | 6 months | Full year | |||
|---|---|---|---|---|---|---|
| Note | 2015 | 2014 | 2015 | 2014 | 2014 | |
| 1 | Revenue | 10,526 | 11,949 | 21,073 | 23,685 | 47,569 |
| Profit before depreciation, amortisation and impairment losses, etc. |
2,631 | 3,085 | 5,201 | 6,102 | 11,919 | |
| Depreciation, amortisation and impairment losses, net |
1,223 | 2,806 | 2,324 | 3,743 | 7,008 | |
| Gain on sale of non-current assets, etc., net | 68 | 57 | 343 | 80 | 600 | |
| Share of profit/loss in joint ventures | 39 | 41 | 100 | 72 | -6 | |
| Share of profit/loss in associated companies | 24 | 156 | 42 | 259 | 412 | |
| Profit before financial items | 1,539 | 533 | 3,362 | 2,770 | 5,917 | |
| Financial items, net | -80 | -185 | -151 | -339 | -606 | |
| Profit before tax | 1,459 | 348 | 3,211 | 2,431 | 5,311 | |
| Tax | 373 | 823 | 553 | 1,776 | 2,972 | |
| Profit for the period – continuing operations | 1,086 | -475 | 2,658 | 655 | 2,339 | |
| 2 | Profit for the period – discontinued operations | - | 2,779 | - | 2,856 | 2,856 |
| 1 | Profit for the period | 1,086 | 2,304 | 2,658 | 3,511 | 5,195 |
| OF WHICH: | ||||||
| Non-controlling interests | 17 | 54 | 50 | 111 | 180 | |
| A.P. Møller - Mærsk A/S' share | 1,069 | 2,250 | 2,608 | 3,400 | 5,015 | |
| 5 | Earnings per share of continuing operations, USD |
49 | -24 | 121 | 26 | 100 |
| 5 | Diluted earnings per share of continuing operations, USD |
49 | -24 | 121 | 26 | 100 |
| 5 | Earnings per share, USD | 49 | 103 | 121 | 156 | 230 |
| 5 | Diluted earnings per share, USD | 49 | 102 | 121 | 155 | 230 |
| Q2 | Q2 | 6 months | Full year | ||
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2014 | |
| Profit for the period | 1,086 | 2,304 | 2,658 | 3,511 | 5,195 |
| Translation from functional currency to | |||||
| presentation currency | 67 | -157 | -188 | -243 | -1,200 |
| Other equity investments | 33 | -15 | -79 | -11 | -121 |
| Cash flow hedges | 202 | 11 | 61 | -68 | -288 |
| Tax on other comprehensive income | -16 | 6 | -2 | 11 | 17 |
| Share of other comprehensive income of joint ventures, net of tax |
6 | -3 | 3 | -3 | -24 |
| Share of other comprehensive income of | |||||
| associated companies, net of tax | 23 | 2 | 23 | -5 | 9 |
| Total items that have been or may be reclassified to the income statement |
315 | -156 | -182 | -319 | -1,607 |
| Actuarial gains/losses on defined benefit plans, etc. | -1 | - | - | - | -21 |
| Tax on actuarial gains/losses on defined benifit plans, etc. |
- | - | - | - | 12 |
| Total items that will not be reclassified to the income statement |
-1 | - | - | - | -9 |
| Other comprehensive income, net of tax | 314 | -156 | -182 | -319 | -1,616 |
| Total comprehensive income for the period | 1,400 | 2,148 | 2,476 | 3,192 | 3,579 |
| OF WHICH: | |||||
| Non-controlling interests | 26 | 39 | 42 | 96 | 134 |
| A.P. Møller - Mærsk A/S' share | 1,374 | 2,109 | 2,434 | 3,096 | 3,445 |
| 30 June 31 December | |||
|---|---|---|---|
| Note | 2015 | 2014 | 2014 |
| Intangible assets | 2,813 | 3,360 | 2,818 |
| Property, plant and equipment | 45,515 | 42,970 | 44,671 |
| Financial non-current assets, etc. | 4,553 | 10,729 | 4,594 |
| Deferred tax | 526 | 607 | 536 |
| Total non-current assets | 53,407 | 57,666 | 52,619 |
| Inventories | 977 | 1,307 | 1,139 |
| Receivables, etc. | 6,413 | 7,147 | 5,911 |
| Securities | 891 | 314 | 379 |
| Cash and bank balances | 1,780 | 3,411 | 3,507 |
| 2 Assets held for sale |
547 | 1,127 | 5,289 |
| Total current assets | 10,608 | 13,306 | 16,225 |
| 1 Total assets |
64,015 | 70,972 | 68,844 |
| 30 June 31 December | |||
|---|---|---|---|
| Note | 2015 | 2014 | 2014 |
| Equity attributable to A.P. Møller - Mærsk A/S | 37,605 | 41,830 | 41,542 |
| Non-controlling interests | 631 | 644 | 683 |
| Total equity | 38,236 | 42,474 | 42,225 |
| Borrowings, non-current | 10,573 | 11,272 | 10,913 |
| Other non-current liabilities | 6,045 | 5,964 | 6,104 |
| Total non-current liabilities | 16,618 | 17,236 | 17,017 |
| Borrowings, current | 1,083 | 2,735 | 1,412 |
| Other current liabilities | 7,822 | 8,489 | 8,178 |
| 2 Liabilities associated with assets held for sale |
256 | 38 | 12 |
| Total current liabilities | 9,161 | 11,262 | 9,602 |
| 1 Total liabilities |
25,779 | 28,498 | 26,619 |
| Total equity and liabilities | 64,015 | 70,972 | 68,844 |
AMOUNTS IN USD MILLION
| 6 months | Full year | ||
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| Profit before financial items | 3,362 | 2,770 | 5,917 |
| Non-cash items, etc. | 1,922 | 3,301 | 6,026 |
| Change in working capital | -540 | -600 | 260 |
| Cash flow from operating activities before financial items and tax | 4,744 | 5,471 | 12,203 |
| Financial payments, net | -31 | -77 | -153 |
| Taxes paid | -986 | -1,771 | -3,289 |
| Cash flow from operating activities | 3,727 | 3,623 | 8,761 |
| Purchase of intangible assets and property, plant and equipment | -3,878 | -4,021 | -8,639 |
| Sale of intangible assets and property, plant and equipment | 303 | 685 | 1,515 |
| Acquisition/sale of subsidiaries and activities, etc., net | 5,007 | 87 | 951 |
| Cash flow used for capital expenditure | 1,432 | -3,249 | -6,173 |
| Purchase/sale of securities, trading portfolio | -35 | -16 | -90 |
| Cash flow used for investing activities | 1,397 | -3,265 | -6,263 |
| Repayment of/proceeds from loans, net | -135 | -1,760 | -2,888 |
| Purchase of own shares | -268 | - | -641 |
| Dividends distributed | -6,141 | -1,131 | -1,131 |
| Dividends distributed to non-controlling interests | -90 | -130 | -148 |
| Other equity transactions | 24 | 116 | 122 |
| Cash flow from financing activities | -6,610 | -2,905 | -4,686 |
| Net cash flow from continuing operations | -1,486 | -2,547 | -2,188 |
| Net cash flow from discontinued operations | - | 2,509 | 2,509 |
| Net cash flow for the period | -1,486 | -38 | 321 |
| Cash and cash equivalents 1 January | 3,406 | 3,358 | 3,358 |
| Currency translation effect on cash and cash equivalents | -206 | 11 | -273 |
| Cash and cash equivalents, end of period | 1,714 | 3,331 | 3,406 |
| Of which classified as assets held for sale | -1 | -2 | -1 |
| Cash and cash equivalents, end of period | 1,713 | 3,329 | 3,405 |
| 6 months | Full year | ||
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| CASH AND CASH EQUIVALENTS | |||
| Cash and bank balances | 1,780 | 3,411 | 3,507 |
| Overdrafts | 67 | 82 | 102 |
| Cash and cash equivalents, end of period | 1,713 | 3,329 | 3,405 |
Cash and bank balances include USD 1.0bn (USD 1.0bn at 31 December 2014) that relates to cash and bank balances in countries with exchange control or other restrictions. These funds are not readily available for general use by the parent company or other subsidiaries.
AMOUNTS IN USD MILLION
| 2015 | A.P. Møller - Mærsk A/S | |||||||
|---|---|---|---|---|---|---|---|---|
| Share capital | Translation reserve |
Reserve for other equity investments |
Reserve for hedges |
Retained earnings |
Total Non-controlling interests |
Total equity | ||
| Equity 1 January 2015 | 3,985 | -7 | -106 | -294 | 37,964 | 41,542 | 683 | 42,225 |
| Translation from functional currency to presentation currency | - | -178 | - | - | - | -178 | -10 | -188 |
| Other equity investments | - | - | -79 | - | - | -79 | - | -79 |
| Cash flow hedges | - | - | - | 59 | - | 59 | 2 | 61 |
| Tax on other comprehensive income | - | - | - | -2 | - | -2 | - | -2 |
| Share of other comprehensive income of joint ventures, net of tax | - | - | - | - | 3 | 3 | - | 3 |
| Share of other comprehensive income of associated companies, net of tax | - | - | - | - | 23 | 23 | - | 23 |
| Other comprehensive income, net of tax | - | -178 | -79 | 57 | 26 | -174 | -8 | -182 |
| Profit for the period | - | - | - | - | 2,608 | 2,608 | 50 | 2,658 |
| Total comprehensive income for the period | - | -178 | -79 | 57 | 2,634 | 2,434 | 42 | 2,476 |
| Dividends to shareholders | - | - | - | - | -6,141 | -6,141 | -90 | -6,231 |
| Value of share-based payments | - | - | - | - | 13 | 13 | - | 13 |
| Sale of non-controlling interests | - | - | - | - | - | - | -4 | -4 |
| Purchase of own shares | - | - | - | - | -268 | -268 | - | -268 |
| Sale of own shares | - | - | - | - | 25 | 25 | - | 25 |
| Capital increases and decreases1 | -79 | - | - | - | 79 | - | - | - |
| Total transactions with shareholders | -79 | - | - | - | -6,292 | -6,371 | -94 | -6,465 |
| Equity 30 June 2015 | 3,906 | -185 | -185 | -237 | 34,306 | 37,605 | 631 | 38,236 |
1 At the Annual General Meeting of A.P. Møller - Mærsk A/S on 30 March 2015, cf. note 5, the shareholders decided on
the cancellation of treasury shares, whereby the share capital has decreased by a transfer of reserves to retained earnings.
AMOUNTS IN USD MILLION
| 2014 | A.P. Møller - Mærsk A/S | |||||||
|---|---|---|---|---|---|---|---|---|
| Share capital | Translation reserve |
Reserve for other equity investments |
Reserve for hedges |
Retained earnings |
Total Non-controlling interests |
Total equity | ||
| Equity 1 January 2014 | 738 | 1,148 | 15 | -24 | 37,952 | 39,829 | 2,684 | 42,513 |
| Translation from functional currency to presentation currency | - | -229 | - | -1 | - | -230 | -13 | -243 |
| Other equity investments | - | - | -11 | - | - | -11 | - | -11 |
| Cash flow hedges | - | - | - | -66 | - | -66 | -2 | -68 |
| Tax on other comprehensive income | - | - | - | 11 | - | 11 | - | 11 |
| Share of other comprehensive income of joint ventures, net of tax | - | - | - | - | -3 | -3 | - | -3 |
| Share of other comprehensive income of associated companies, net of tax | - | - | - | - | -5 | -5 | - | -5 |
| Other comprehensive income, net of tax | - | -229 | -11 | -56 | -8 | -304 | -15 | -319 |
| Profit for the period | - | - | - | - | 3,400 | 3,400 | 111 | 3,511 |
| Total comprehensive income for the period | - | -229 | -11 | -56 | 3,392 | 3,096 | 96 | 3,192 |
| Dividends to shareholders | - | - | - | - | -1,131 | -1,131 | -671 | -1,802 |
| Value of share-based payments | - | - | - | - | 7 | 7 | - | 7 |
| Sale of non-controlling interests | - | - | - | - | -10 | -10 | -1,4872 | -1,497 |
| Sale of own shares | - | - | - | - | 39 | 39 | - | 39 |
| Capital increases and decreases1 | 3,247 | - | - | - | -3,247 | - | 16 | 16 |
| Other equity movements | - | - | - | - | - | - | 6 | 6 |
| Total transactions with shareholders | 3,247 | - | - | - | -4,342 | -1,095 | -2,136 | -3,231 |
| Equity 30 June 2014 | 3,985 | 919 | 4 | -80 | 37,002 | 41,830 | 644 | 42,474 |
1 At the Annual General Meeting of A.P. Møller - Mærsk A/S on 31 March 2014 the shareholders decided on the issue of
bonus shares by four shares to one, whereby the share capital has increased by a transfer of reserves from retained earnings.
2 Sale of Dansk Supermarked Group in April 2014. A 19% share is retained by the Group as available-for-sale (other equity investments).
— Discontinued operations and assets held for sale 38
— Share capital and earnings per share 40
— Accounting policies, judgements and significant estimates 41
AMOUNTS IN USD MILLION
| Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Maersk Supply Service |
Maersk Tankers |
Damco | Svitzer | Total reportable segments |
|
|---|---|---|---|---|---|---|---|---|---|
| Q2 2015 | |||||||||
| External revenue | 6,186 | 1,583 | 665 | 620 | 154 | 260 | 655 | 155 | 10,278 |
| Inter-segment revenue | 77 | - | 368 | 4 | 3 | - | - | 6 | 458 |
| Total revenue | 6,263 | 1,583 | 1,033 | 624 | 157 | 260 | 655 | 161 | 10,736 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. | 998 | 849 | 206 | 361 | 73 | 74 | 17 | 50 | 2,628 |
| Depreciation and amortisation | 476 | 360 | 77 | 118 | 35 | 34 | 7 | 21 | 1,128 |
| Impairment losses | - | 80 | - | - | - | - | - | - | 80 |
| Gain/loss on sale of non-current assets, etc., net | 8 | - | 2 | 29 | 31 | -4 | - | 2 | 68 |
| Share of profit/loss in joint ventures | - | - | 32 | -5 | - | - | 3 | 5 | 35 |
| Share of profit/loss in associated companies | - | - | 22 | - | - | - | - | - | 22 |
| Profit/loss before financial items (EBIT) | 530 | 409 | 185 | 267 | 69 | 36 | 13 | 36 | 1,545 |
| Tax | 23 | 272 | 24 | 49 | 5 | 1 | 6 | 4 | 384 |
| Net operating profit/loss after tax (NOPAT) | 507 | 137 | 161 | 218 | 64 | 35 | 7 | 32 | 1,161 |
| Cash flow from operating activities | 873 | 611 | 176 | 248 | 69 | 55 | 20 | 49 | 2,101 |
| Cash flow used for capital expenditure | -861 | -502 | -169 | -45 | - | -21 | -1 | -60 | -1,659 |
| Free cash flow | 12 | 109 | 7 | 203 | 69 | 34 | 19 | -11 | 442 |
| Investments in non-current assets1 | 889 | 568 | 196 | 76 | 32 | 113 | 2 | 70 | 1,946 |
1 Comprise additions of intangible assets and property, plant and equipment,
AMOUNTS IN USD MILLION
| Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Maersk Supply Service |
Maersk Tankers |
Damco | Svitzer | Total reportable segments |
|
|---|---|---|---|---|---|---|---|---|---|
| 6 MONTHS 2015 | |||||||||
| External revenue | 12,343 | 3,016 | 1,413 | 1,246 | 335 | 535 | 1,335 | 326 | 20,549 |
| Inter-segment revenue | 174 | - | 756 | 8 | 5 | 1 | 3 | 13 | 960 |
| Total revenue | 12,517 | 3,016 | 2,169 | 1,254 | 340 | 536 | 1,338 | 339 | 21,509 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. | 2,200 | 1,439 | 426 | 704 | 152 | 142 | 18 | 100 | 5,181 |
| Depreciation and amortisation | 945 | 671 | 154 | 232 | 70 | 68 | 14 | 42 | 2,196 |
| Impairment losses | - | 80 | - | 27 | - | - | - | - | 107 |
| Reversal of impairment losses | - | - | 7 | - | - | - | - | - | 7 |
| Gain/loss on sale of non-current assets, etc., net | 12 | 3 | 10 | 29 | 29 | -2 | 2 | 3 | 86 |
| Share of profit/loss in joint ventures | - | - | 71 | 8 | - | - | 4 | 10 | 93 |
| Share of profit/loss in associated companies | -1 | - | 42 | - | - | - | - | - | 41 |
| Profit/loss before financial items (EBIT) | 1,266 | 691 | 402 | 482 | 111 | 72 | 10 | 71 | 3,105 |
| Tax | 45 | 346 | 51 | 96 | 9 | 1 | 12 | 10 | 570 |
| Net operating profit/loss after tax (NOPAT) | 1,221 | 345 | 351 | 386 | 102 | 71 | -2 | 61 | 2,535 |
| Cash flow from operating activities | 1,844 | 716 | 447 | 528 | 107 | 131 | 32 | 83 | 3,888 |
| Cash flow used for capital expenditure | -1,063 | -996 | -391 | -731 | -17 | -55 | - | -105 | -3,358 |
| Free cash flow | 781 | -280 | 56 | -203 | 90 | 76 | 32 | -22 | 530 |
| Investments in non-current assets1 | 1,130 | 1,034 | 448 | 756 | 66 | 252 | 5 | 118 | 3,809 |
| Intangible assets | 1 | 1,363 | 1,265 | 39 | 9 | - | 110 | 25 | 2,812 |
| Property, plant and equipment | 21,843 | 7,927 | 2,865 | 7,956 | 1,711 | 1,615 | 79 | 1,029 | 45,025 |
| Investments in joint ventures | - | - | 1,489 | 126 | - | 1 | 25 | 77 | 1,718 |
| Investments in associated companies | 1 | - | 523 | - | - | - | - | - | 524 |
| Other non-current assets | 179 | 613 | 131 | 30 | 6 | - | 35 | 47 | 1,041 |
| Assets held for sale | 11 | - | 51 | - | - | - | 6 | - | 68 |
| Other current assets | 3,238 | 1,361 | 768 | 741 | 180 | 177 | 613 | 114 | 7,192 |
| Total assets | 25,273 | 11,264 | 7,092 | 8,892 | 1,906 | 1,793 | 868 | 1,292 | 58,380 |
| Non-interest bearing liabilities | 4,933 | 5,302 | 1,097 | 646 | 207 | 213 | 582 | 178 | 13,158 |
| Invested capital, net | 20,340 | 5,962 | 5,995 | 8,246 | 1,699 | 1,580 | 286 | 1,114 | 45,222 |
1 Comprise additions of intangible assets and property, plant and equipment,
AMOUNTS IN USD MILLION
| Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Maersk Supply Service |
Maersk Tankers |
Damco | Svitzer | Total reportable segments |
|
|---|---|---|---|---|---|---|---|---|---|
| Q2 2014 | |||||||||
| External revenue | 6,783 | 2,272 | 695 | 465 | 174 | 285 | 785 | 200 | 11,659 |
| Inter-segment revenue | 119 | - | 435 | - | 2 | - | - | 12 | 568 |
| Total revenue | 6,902 | 2,272 | 1,130 | 465 | 176 | 285 | 785 | 212 | 12,227 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. | 1,024 | 1,441 | 260 | 214 | 69 | 31 | -19 | 46 | 3,066 |
| Depreciation and amortisation | 461 | 366 | 73 | 62 | 34 | 32 | 7 | 23 | 1,058 |
| Impairment losses | - | 1,735 | - | - | - | - | - | - | 1,735 |
| Reversal of impairment losses | - | - | - | - | - | - | - | 3 | 3 |
| Gain/loss on sale of non-current assets, etc., net | 4 | - | 18 | - | - | -2 | - | 2 | 22 |
| Share of profit/loss in joint ventures | - | - | 28 | -2 | - | - | 2 | 9 | 37 |
| Share of profit/loss in associated companies | - | -2 | 25 | - | - | - | - | - | 23 |
| Profit/loss before financial items (EBIT) | 567 | -662 | 258 | 150 | 35 | -3 | -24 | 37 | 358 |
| Tax | 20 | 735 | 35 | 33 | 2 | +1 | 8 | 5 | 837 |
| Net operating profit/loss after tax (NOPAT) | 547 | -1,397 | 223 | 117 | 33 | -2 | -32 | 32 | -479 |
| Cash flow from operating activities | 870 | 718 | 192 | 173 | 71 | 83 | -71 | 28 | 2,064 |
| Cash flow used for capital expenditure | -488 | -546 | -215 | -478 | -17 | 423 | -23 | -45 | -1,389 |
| Free cash flow | 382 | 172 | -23 | -305 | 54 | 506 | -94 | -17 | 675 |
| Investments in non-current assets1 | 535 | 849 | 248 | 484 | 31 | 6 | 6 | 52 | 2,211 |
1 Comprise additions of intangible assets and property, plant and equipment,
AMOUNTS IN USD MILLION
| Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Maersk Supply Service |
Maersk Tankers |
Damco | Svitzer | Total reportable segments |
|
|---|---|---|---|---|---|---|---|---|---|
| 6 MONTHS 2014 | |||||||||
| External revenue | 13,122 | 4,720 | 1,360 | 933 | 347 | 623 | 1,530 | 410 | 23,045 |
| Inter-segment revenue | 243 | - | 862 | 9 | 4 | - | 4 | 19 | 1,141 |
| Total revenue | 13,365 | 4,720 | 2,222 | 942 | 351 | 623 | 1,534 | 429 | 24,186 |
| Profit/loss before depreciation, amortisation and impairment losses, etc. | 1,886 | 2,980 | 525 | 390 | 131 | 96 | -18 | 99 | 6,089 |
| Depreciation and amortisation | 908 | 685 | 145 | 121 | 69 | 65 | 16 | 43 | 2,052 |
| Impairment losses | - | 1,735 | - | - | - | 4 | - | - | 1,739 |
| Reversal of impairment losses | 72 | - | - | - | - | - | - | 3 | 75 |
| Gain/loss on sale of non-current assets, etc., net | 20 | - | 16 | 9 | - | -2 | - | 3 | 46 |
| Share of profit/loss in joint ventures | - | - | 47 | 1 | 1 | - | 4 | 13 | 66 |
| Share of profit/loss in associated companies | - | -5 | 45 | - | - | - | - | - | 40 |
| Profit/loss before financial items (EBIT) | 1,070 | 555 | 488 | 279 | 63 | 25 | -30 | 75 | 2,525 |
| Tax | 69 | 1,606 | 50 | 46 | 6 | +1 | 12 | 10 | 1,798 |
| Net operating profit/loss after tax (NOPAT) | 1,001 | -1,051 | 438 | 233 | 57 | 26 | -42 | 65 | 727 |
| Cash flow from operating activities | 1,583 | 1,452 | 497 | 252 | 149 | 120 | -133 | 76 | 3,996 |
| Cash flow used for capital expenditure | -856 | -1,025 | -335 | -1,330 | -51 | 484 | -28 | -122 | -3,263 |
| Free cash flow | 727 | 427 | 162 | -1,078 | 98 | 604 | -161 | -46 | 733 |
| Investments in non-current assets1 | 961 | 1,264 | 445 | 1,451 | 67 | 22 | 11 | 83 | 4,304 |
| Intangible assets | 1 | 1,584 | 1,149 | 33 | 8 | 3 | 191 | 387 | 3,356 |
| Property, plant and equipment | 21,482 | 6,907 | 2,752 | 6,774 | 1,705 | 1,371 | 88 | 1,026 | 42,105 |
| Investments in joint ventures | - | - | 1,650 | 160 | 1 | 4 | 25 | 63 | 1,903 |
| Investments in associated companies | 1 | - | 520 | - | - | 1 | - | - | 522 |
| Other non-current assets | 123 | 712 | 165 | 70 | 4 | - | 51 | 47 | 1,172 |
| Assets held for sale | 22 | - | 482 | - | 16 | 485 | 5 | - | 1,010 |
| Other current assets | 3,279 | 1,510 | 861 | 680 | 196 | 269 | 851 | 195 | 7,841 |
| Total assets | 24,908 | 10,713 | 7,579 | 7,717 | 1,930 | 2,133 | 1,211 | 1,718 | 57,909 |
| Non-interest bearing liabilities | 4,732 | 5,706 | 1,195 | 1,022 | 268 | 379 | 697 | 208 | 14,207 |
| Invested capital, net | 20,176 | 5,007 | 6,384 | 6,695 | 1,662 | 1,754 | 514 | 1,510 | 43,702 |
1 Comprise additions of intangible assets and property, plant and equipment,
AMOUNTS IN USD MILLION
| Q2 Q2 |
6 months | |||
|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | |
| REVENUE | ||||
| Reportable segments | 10,736 | 12,227 | 21,509 | 24,186 |
| Other businesses | 326 | 350 | 691 | 713 |
| Unallocated activities (Maersk Oil Trading) | 61 | 43 | 119 | 113 |
| Eliminations | -597 | -671 | -1,246 | -1,327 |
| Total | 10,526 | 11,949 | 21,073 | 23,685 |
| PROFIT FOR THE PERIOD | ||||
| Reportable segments | 1,161 | -479 | 2,535 | 727 |
| Other businesses | 8 | 175 | 245 | 283 |
| Financial items | -80 | -185 | -151 | -339 |
| Unallocated tax | +8 | +15 | +16 | +27 |
| Other unallocated items, cost | 5 | 7 | +7 | 41 |
| Eliminations | -6 | 6 | 6 | -2 |
| Total continuing operations | 1,086 | -475 | 2,658 | 655 |
| Discontinued operations, after eliminations | - | 2,779 | - | 2,856 |
| Total | 1,086 | 2,304 | 2,658 | 3,511 |
| 30 June | ||
|---|---|---|
| 2015 | 2014 | |
| ASSETS | ||
| Reportable segments | 58,380 | 57,909 |
| Other businesses | 1,734 | 7,290 |
| Unallocated activities | 5,779 | 7,705 |
| Eliminations | -1,878 | -1,932 |
| Total | 64,015 | 70,972 |
| LIABILITIES | ||
| Reportable segments | 13,158 | 14,207 |
| Other businesses | 434 | 412 |
| Unallocated activities | 14,010 | 15,707 |
| Eliminations | -1,823 | -1,828 |
| Total | 25,779 | 28,498 |
AMOUNTS IN USD MILLION
| 6 months | Full year | |||
|---|---|---|---|---|
| 2015 | 2014 | 2014 | ||
| PROFIT FOR THE PERIOD – DISCONTINUED OPERATIONS | ||||
| Revenue | - | 2,768 | 2,768 | |
| Expenses | - | 2,662 | 2,662 | |
| Gains/losses on sale of assets & businesses | - | 2,775 | 2,775 | |
| Profit before tax, etc. | - | 2,881 | 2,881 | |
| Tax | - | 25 | 25 | |
| Profit for the period – discontinued operations | - | 2,856 | 2,856 | |
| A.P. Møller - Mærsk A/S' share hereof | - | 2,831 | 2,831 | |
| Earnings earnings per share | - | 130 | 130 | |
| Diluted earnings per share | - | 129 | 130 | |
| CASH FLOWS FROM DISCONTINUED OPERATIONS FOR THE PERIOD |
||||
| Cash flow from operating activities | - | -94 | -94 | |
| Cash flow used for investing activities | - | 1,914 | 1,914 | |
| Cash flow from financing activities | - | 689 | 689 | |
| Net cash flow from discontinued operations | - | 2,509 | 2,509 |
| 30 June 31 December | |||
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| BALANCE SHEET ITEMS COMPRISE: | |||
| Non-current assets | 517 | 1,092 | 5,283 |
| Current assets | 30 | 35 | 6 |
| Assets held for sale | 547 | 1,127 | 5,289 |
| Provisions | - | 6 | 1 |
| Other liabilities | 256 | 32 | 11 |
| Liabilities associated with assets held for sale | 256 | 38 | 12 |
Assets held for sale primarily relate to Esvagt Group. The agreement to sell Esvagt Group was announced early July and completion is pending regulatory approval which is anticipated by the end of September 2015.
The shares in Danske Bank were held for sale at the end of 2014 and were divested in March 2015 through an offer to shareholders. Out of the 202,209,171 Danske Bank shares offered, 171,714,796 shares were acquired by A.P. Møller Holding A/S. The offer price which was determined as the volume weighted average price (VWAP) of Danske Bank shares traded on Nasdaq Copenhagen during the five trading days in the period from Friday 20 March 2015 to Thursday 26 March 2015 (both days incl.) amounted to DKK 177.27 per Danske Bank share.
Dansk Supermarked Group was classified as discontinued operations and information of discontinued operations above solely relates to Dansk Supermarked Group.
After the sale of the majority share in Dansk Supermarked Group, a 19% share was retained by the Group. This investment was classified as available-for-sale (other equity investments) in unallocated activities and measured at fair value.
Assets held for sale at 30 June 2014 related primarily to seven vessels in the VLCC segment in Maersk Tankers and the Terminal in Virginia, USA in APM Terminals.
Except of the below, the financial risks, etc. are not significantly different from those described in note 18 of the consolidated financial statements for 2014, to which reference is made.
| 30 June 31 December | |||
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| Borrowings | 11,656 | 14,007 | 12,325 |
| Net interest-bearing debt | 8,835 | 9,467 | 7,698 |
| Liquidity reserve1 | 9,358 | 11,647 | 11,562 |
1 Liquidity reserve is defined as undrawn committed revolving facilities with more than one year to expiry, securities and cash and bank balances, excluding balances in countries with exchange control or other restrictions.
Based on the liquidity reserve, the size of the committed loan facilities, including loans for the financing of specific assets, the maturity of outstanding loans, and the current investment profile, the Group's financial resources are deemed satisfactory. The Group's long term objective is to maintain a conservative funding profile in line with its current BBB+/Baa1 rating level. USD 0.7bn of undrawn financing commitments were either cancelled or expired in the first six months of 2015 due to the Group's strong liquidity position.
The average term to maturity of loan facilities in the Group was about four years (about five years at 31 December 2014).
AMOUNTS IN USD MILLION AMOUNTS IN USD MILLION
At 30 June 2015, the net present value of operating lease commitments totalled USD 7.6bn using a discount rate of 6%, a decrease from USD 7.7bn at 31 December 2014, primarily due to payments in 2015.
About one third of the time charter payments in Maersk Line and Maersk Tankers are estimated to relate to operating costs for the assets.
| Capital commitments | Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Other | Total |
|---|---|---|---|---|---|---|
| 30 JUNE 2015 | ||||||
| Capital commitments relating to acquisition of non-current assets |
2,199 | 2,697 | 946 | 516 | 1,468 | 7,826 |
| Commitments towards concession | ||||||
| grantors | - | 763 | 1,301 | - | - | 2,064 |
| Total | 2,199 | 3,460 | 2,247 | 516 | 1,468 | 9,890 |
| 31 DECEMBER 2014 | ||||||
| Capital commitments relating to | ||||||
| acquisition of non-current assets | 773 | 1,143 | 1,095 | 1,132 | 1,671 | 5,814 |
| Commitments towards concession | ||||||
| grantors | - | 1,088 | 1,519 | - | 1 | 2,608 |
| Total | 773 | 2,231 | 2,614 | 1,132 | 1,672 | 8,422 |
AMOUNTS IN USD MILLION
| No. | |||||
|---|---|---|---|---|---|
| Newbuilding programme at 30 June 2015 | 2015 | 2016 | 2017 | 2018 - | Total |
| Container vessels | - | - | 13 | 5 | 18 |
| Rigs and drillships | - | 1 | - | - | 1 |
| Tanker vessels | 1 | 7 | 1 | - | 9 |
| Anchor handling vessels, tugboats | |||||
| and standby vessels, etc. | 3 | 10 | 6 | 2 | 21 |
| Total | 4 | 18 | 20 | 7 | 49 |
| Capital commitments relating to the | USD million | ||||
|---|---|---|---|---|---|
| newbuilding programme at 30 June 2015 | 2015 | 2016 | 2017 | 2018 - | Total |
| Container vessels | 347 | 212 | 965 | 480 | 2,004 |
| Rigs and drillships | 4 | 426 | - | - | 430 |
| Tanker vessels | 66 | 165 | 17 | - | 248 |
| Anchor handling vessels, tugboats | |||||
| and standby vessels, etc. | 91 | 315 | 564 | 196 | 1,166 |
| Total | 508 | 1,118 | 1,546 | 676 | 3,848 |
USD 3.8bn of the total capital commitments is related to the newbuilding programme for ships, rigs, etc. at a total contract price of USD 4.1bn including owner-furnished equipment. The remaining capital commitments of USD 6.1bn relate to investments mainly within APM Terminals and Maersk Oil.
The capital commitments will be financed by cash flow from operating activities as well as existing and new loan facilities.
Development in the number of shares:
| A-shares of DKK 1,000 |
DKK 500 | B-shares of DKK 1,000 |
DKK 500 | Nominal DKK million |
USD million | |
|---|---|---|---|---|---|---|
| 1 January 2015 | 10,988,834 | 332 | 10,988,905 | 190 | 21,978 | 3,985 |
| Cancellation | 86,500 | - | 346,118 | - | 433 | 79 |
| Conversion | 7 | -14 | 3 | -6 | - | - |
| 30 June 2015 | 10,902,341 | 318 | 10,642,790 | 184 | 21,545 | 3,906 |
At the Annual General Meeting of A.P. Møller - Mærsk A/S on 30 March 2015 the shareholders decided on the cancellation of treasury shares, whereby the share capital is decreased. On 10 June 2015, the Company's share capital was reduced from nominally DKK 21,978,000,000 with nominally DKK 432,618,000 in total, divided between 86,500 A shares of DKK 1,000 and 346,118 B shares of DKK 1,000 to nominally DKK 21,545,382,000.
| No. of shares of DKK 1,000 | Nominal value DKK | % of share capital | |||||
|---|---|---|---|---|---|---|---|
| Own shares | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |
| A SHARES | |||||||
| 1 January | 61,075 | 0 | 61 | 0 | 0.28% | 0.00% | |
| Addition | 25,425 | - | 25 | - | 0.11% | 0.00% | |
| Cancellation | 86,500 | - | 86 | - | 0.39% | 0.00% | |
| 30 June | - | 0 | - | 0 | 0.00% | 0.00% | |
| B SHARES | |||||||
| 1 January | 342,066 | 132,628 | 342 | 133 | 1.56% | 0.60% | |
| Addition | 106,815 | - | 107 | - | 0.49% | 0.00% | |
| Cancellation | 346,118 | - | 346 | - | 1.57% | 0.00% | |
| Disposal | 16,956 | 26,750 | 17 | 27 | 0.09% | 0.12% | |
| 30 June | 85,807 | 105,878 | 86 | 106 | 0.39% | 0.48% | |
Additions of own shares are related to the buy-back programme initiated in September 2014. Disposals of own shares are primarily related to the share option programme.
| A.P. Møller - Mærsk A/S' share of: | 2015 | 2014 |
|---|---|---|
| Profit for the period of continuing operations | 2,608 | 569 |
| Profit for the period of discontinued operations | - | 2,831 |
| Profit for the period | 2,608 | 3,400 |
| 2015 | 2014 | |
|---|---|---|
| Issued shares 1 January | 21,978,000 | 21,978,000 |
| Average number of own shares | 455,514 | 118,986 |
| Average number of cancelled shares | 48,069 | - |
| Average number of shares | 21,474,417 | 21,859,014 |
At 30 June 2015, there is a dilution effect on earnings per share on 23,470 (43,620) issued share options corresponding to 0.11% (0.20%). There are no share options without dilution effect.
The interim consolidated financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB) and as adopted by the EU and Danish disclosure requirements for listed companies.
The accounting policies, judgements and significant estimates are consistent with those applied in the consolidated financial statements for 2014 on pages 65-71 of the Annual Report, to which reference is made.
As of 1 January 2015 the Group has implemented Annual improvements 2012, Annual improvements 2013 and Amendment to IAS 19 'Employee benefits'. The amendments encompass various clarifications and additions to disclosure requirements with no material effect on the financial statements.
Jesper Cramon Finn Glismand Henrik Lund
Design and layout e-Types & e-Types Daily
ISSN 1604-2913 Produced in Denmark 2015
Michael Pram Rasmussen, Chairman Niels Jacobsen, Vice chairman Ane Mærsk Mc-Kinney Uggla, Vice chairman Dorothee Blessing Sir John Bond Niels B. Christiansen Renata Frolova Arne Karlsson Jan Leschly Palle Vestergaard Rasmussen Robert Routs Robert Mærsk Uggla
Nils S. Andersen, Group CEO Kim Fejfer Claus V. Hemmingsen Søren Skou Jakob Thomasen Trond Westlie
AUDIT COMMITTEE
Arne Karlsson, Chairman Niels B. Christiansen Robert Routs
Michael Pram Rasmussen, Chairman Niels Jacobsen Ane Mærsk Mc-Kinney Uggla
PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab
KPMG Statsautoriseret Revisionspartnerselskab
Esplanaden 50 DK-1098 Copenhagen K Tel. +45 33 63 33 63 www.maersk.com [email protected]
Incorporated in Denmark under registration no. 22756214
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