Maersk drops as it misses estimates after an ‘unusual’ year

Bloomberg

A.P. Moller-Maersk A/S fell short of earnings expectations last year but promised its shareholders profit at the world’s biggest shipping company will grow as much as 43 percent in 2018.
Maersk opened about 5 percent lower in Copenhagen, making it the day’s worst performer on Denmark’s index of benchmark stocks.
In a note to clients, Clarksons Platou said Maersk disappointed both on the results it delivered last year, and on its outlook.
“As always, management is usually conservative in their guidance at the start of the year given low visibility in the industry,” analysts Frode Morkedal and Herman Hildan said
in the note.
Chief Executive Officer Soren Skou described last year as “unusual and eventful,” in a statement. But he assured investors that the company’s “vision of becoming the global integrator of container logistics, connecting and simplifying our customers’ supply chains, is taking shape.”
Revenue was $30.9 billion Ebit reached $641 million vs. estimate of $1.03 billion. The underlying result was $356 million vs. estimate of $425.4 million ROE after tax minus 3.7 percent. Earnings before interest, tax, depreciation and amortization will be in the range of $4 billion to $5 billion in 2018, the company said. That compares with the $3.5 billion it booked in 2017. The company proposed a dividend of $24 a share.
Skou said 2017 was characterised by “strong underlying market conditions.” But the result was hurt in part after Maersk was hit by a cyberattack in June that mainly affected its Maersk Line unit. Weaker rates and increasing bunker costs, “especially in the fourth quarter,” also dragged down last year’s result, he said.
In an interview with Bloomberg Television’s Matt Miller and Guy Johnson, Skou said the global economic outlook was promising and indicated demand in the shipping freight industry will continue to improve. “On the whole we have a very positive view,” he said.
Maersk Line won market share in the last three months of the year, with volumes growing 3.6 percent. That’s more than the 3 percent growth in container shipping market overall. But costs rose 3.7 percent in the quarter, as Maersk absorbed the effect of higher prices for bunker fuel.