Sector News

Maersk to sell 2 major business units?

August 19, 2016
News

Following news of a sudden dip in profits, Maersk Group is set to announce the results of its strategic and structural review; and while the group are not expected to divest, it is less clear as to whether its terminal operating unit, APM Terminals (APMT) and logistics unit Damco will be sold off, according to JOC.com.

Analyst Alphaliner said: “The symbiotic relationship between Maersk Line and AMT suggests that a divestment of the terminal operations should likely be avoided at this stage, especially since the weak state of market weighs heavy on the valuations of APMT and other terminal operators.”

In a recent press release, Soren Skou, CEO of Maersk, said: To ensure the future strength, profitability and development of new growth opportunities of the company, the Board of Directors have initiated a strategic review of the company and will report on progress of the review before the end of Q3, 2016.”

Maersk’s loss of almost US$1 billion in Q2, 2016, in comparison to the same period a year prior has been contingent on the tough conditions currently plaguing many global carriers.

Technical Paper: Port Investment: The Rise of the Big Financial Players

Both Maersk and its shipping arm Maersk Line’s expectations for an underlying result that is significantly lower than 2015 is unchanged.

However, container transportation is still anticipated to increase between 1-3% and Maersk stands by its strong liquidity reserve of $11.5 billion.

In a recent report by PTI, Simon Heaney Consultant and Research Manager at Drewry Supply Chain Advisors explained that revenue is probably going to be lower than it was in the financial crisis of 2009 for global carriers.

Also, while shipping lines are cost-effective and more fuel efficient, the real challenge is cutting costs fast enough to offset the losses in revenue.

It is only since Q4, 2015 that carriers have not been able to do this, and now very much is dependent on a rebalance in supply and demand to push up rates, and thereby, profits.

Source: Port Technology

Related News

August 23, 2019

The higher purpose of being a CEO

Borderless Leadership

When I left my second large company experience to become President of a small manufacturing company I did so driven by ego; I fancied the title. Soon enough I realized […]

August 23, 2019

As Brexit nears, Britain’s drugs, devices and pricing regulators seek the exit

Life sciences

Firm details on exactly how the U.K. will regulate new medicines is still to be decided after it leaves the EU later this year (caveats on timing abound), but we […]

August 23, 2019

The Simply Good Foods Company acquires Quest Nutrition for $1bn

Food & Drink

The Simply Good Foods Company, the owner of Atkins-branded food products, has secured a deal to acquire protein snack maker Quest Nutrition for $1 billion. Quest, which sells a range […]