Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on AP MOELLER-MAERSK A S-B. We currently have 11 research reports from 1 professional analysts.
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AP MOELLER-MAERSK A S-B
AP MOELLER-MAERSK A S-B
AP Moller-Maersk heads in a new direction
13 Dec 16
The new group’s strategy consists of focusing on container shipping, logistics and port activities (75% of total revenue and 67% of the invested capital in 2015) as mentioned in September 2016. The separation of the oil and oil-related businesses leads to the loss of 25% of total revenue which should be replaced by organic revenue growth and external growth in Transport & logistics. The acquisition of Hamburg Süd (2015 revenue of $6.7bn), which is subject to the regulatory approvals, will contribute c.15% of revenue. The problem that has to be solved in Transport & logistics is how to generate revenue growth over a cycle, contrary to the stagnation seen in 2010-15 (revenue of $32bn in 2015 vs $33bn in 2010 with peaks of $36bn in 2012 and 2014) and a volatile ROIC that led to 7% on average over 2010-15, below the target of 8.5%+ assigned for the future. Regarding the Energy activities (revenue of $9.8bn, underlying profit of $1.4bn in 2015), the priority is to maximise value until the separation, which should take the form of listings, mergers and/or joint ventures. In this value context, capital allocation will be mainly in favour of Maersk Oil (57% of the Energy division’s revenue) while limited investments are forecast at Maersk Drilling, Maersk Supply Service and Maersk Tankers in order to maintain their market positions. The mid-term financial goals are summarised in two key ratios (equity/adjusted total assets >30%; adjusted FFO/adjusted net debt >30% – restated from the operating lease debt equivalent) and measures to keep an investment grade rating, including the reduction in capex and commitments (lower investment needed in Transport & logistics, strict capital allocation in Energy), divestments from Energy depending on credit metrics and outlook. Finally, the maintenance of the dividend policy which consists of increasing the dividend/share supported by underlying earnings growth.
Maersk Line's offensive
01 Dec 16
Maersk Line has reached an agreement with the Oetker Group related to the acquisition of the container shipping company Hamburg Süd. The acquisition price is undisclosed, nor are the financial data. Hamburg Süd is ranked n°7 in the container shipping market with a market share of 2.9%, while Maersk Line is the market leader with a market share of 15.7% (pre-acquisition). The company had revenue of $6.7bn in 2015 (o/w $6.3bn in container shipping) and employs 5,960 people in the world, o/w 1,440 people at sea. The company operates under three brands, Hamburg Süd, CCNI based in Chile, and Aliança based in Brazil. In 2015, Maersk Line’s revenue was $23.7bn. The operation is subject to the final agreement and regulatory approvals in China, Korea, Australia, Brazil, the US and the EU, amongst others. The operation is expected to be completed at the end of the year 2017.
Speculations in oil & gas
30 Nov 16
According to the new strategy, AP Moller-Maersk is now split into two divisions: Transport & logistics and Energy. In the Energy division, which includes Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers, the final goal is to separate these businesses from AP Moller-Maersk through a merger, a joint-venture and/or a listing. There are currently rumours of talks between AP Moller-Maersk and Dong Energy to merge Maersk Oil (2015 revenue of $5.6bn, production of 312,000 boepd) and the Dong Energy’s oil & gas activities (2015 revenue of $1.9bn, production of 115,000boepd). Established in 2006 by the merger of six Danish energy companies, Dong Energy (2015 total revenue of $10.5bn – c.$11bn under IFRS standards) is involved in the production of oil & gas, renewables and power distribution. Dong Energy was listed at DKK235/share (market capitalisation of DKK98.2bn) on Nasdaq Copenhagen on 9 June 2016. The Kingdom of Denmark remains the main shareholder with 50.4% of the shares, ahead of New Energy Investment with 17.4%.
Poor 2016 confirmed, lack of visibility for 2017.
02 Nov 16
AP Moller-Maersk delivered a poor set of results in a depressed environment in both transport and energy. Nevertheless, there were some positive achievements in Q3 16 such as a further gain in market share at Maersk Line and breakeven now below $40/bl (vs $40-45/bl) at Maersk Oil. Maersk Drilling had an exceptional and non-recurring performance due to strong termination fees. Q3 16 results: Based on revenue of $9,177m (-9%), impacted by a lower average container freight rate (-16% to $1,811/FFE) and the oil price (-8% to $46/bl), EBITDA was down to $1,887m (-16%), EBIT collapsed to $805m (-33%) including a lower gain on the sale of assets ($9m vs $118m in Q3 15). Group net profit was $429m (-43%). Restated for the gain on the sale of assets and impairment losses, the underlying net result dropped to $426m (-36%) due to lower contributions from Maersk Line which was loss-making ($-122m vs $243m in Q3 15), APM Terminals which was impacted by tough trading conditions in Latin America, North-West Europe and some oil-related countries in Africa (-28% to $126m), and APM Shipping Services ($25m vs $150m in Q3 15) which suffered losses at Maersk Tankers ($-1m vs $58m in Q3 15) and Maersk Supply Service ($-11m vs $44m in Q3 15). 9m figures: AP Moller-Maersk posted revenue of $26,577m (-15%), EBITDA of $5,263m (-29%), EBIT of $1,951m (-57%) after a lower gain on the sale of assets ($131m vs $461m in Q3 15) and share of profit of joint ventures and associated companies (a total of $167m vs $221m in Q3 15). Group net profit was $741m (vs $3,363m in Q3 15). Operating cash flow decreased to $2,861m (-52%) due to lower EBITDA and was close to capital expenditure of $2,936m net of the sale of assets. Other outflows included principally acquisitions ($694m), the payment of the ordinary dividend to shareholders ($953m) and the purchase of own shares ($-475m). Net debt increased to $11.3bn and gearing remained reasonable at 32% as of 30 September 2016.
From a diversified group to a transport & logistics company
29 Sep 16
On 22 September 2016, AP Moller-Maersk released an update on its new strategic issues. The group’s activities will be split into two divisions: Transport & logistics and Energy. The Transport & logistics division includes Maersk Line, APM Terminals, Svitzer, Damco and Maersk Container Industry and is targeting an increase of up to 2pts of the ROIC in three years thanks to synergies between the entities which operate standalone currently and not as an integrated company. The Energy division includes Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers. The final goal is the separation of these businesses from AP Moller-Maersk within 24 months. Management is exploring various solutions for each entities such as a merger, a joint-venture and/or a listing. Translated into financial goals, AP Moller-Maersk is targeting growth, an improvement in profitability and a disciplined capital allocation that will enable an investment grade rating.
Cost reductions everywhere
12 Aug 16
AP Moller-Maersk had poor results in Q2 16 as expected. In particular, Maersk Line turned negative at the underlying profit level. Q2 16 earnings. - Revenue reached $8,861m (-16%). In the container shipping activity, key indicators included an increase in volume (+6.9% to 2.65m FFE) above market growth (+2%) and a further reduction in average freight rate (-24% yoy to $1,716/FFE, -8% sequentially). In the oil & gas business, the average oil price was down to $46/bl (-26% yoy). - Group EBITDA decreased to $1,779m (-32%) due to lower contribution from Maersk Line (-63% to $365m), Maersk Oil (-11% to $755m), APM Terminals (-9% to $187m), Maersk Drilling (-9% to $330m), and APM Shipping Services (-27% to $157m). - Group profit collapsed to $118m (vs $1,086m in Q2 15) and the underlying profit dropped to $134m (vs $1,099m in Q2 15) due to an underlying loss of $-139m at Maersk Line (vs $+499m in Q2 15) and lower contributions from all other activities, o/w Maersk Oil which had an underlying result of $130m (vs $217m in Q2 15). H1 16 key figures. - Based on revenue of $17,400m (-17%), EBITDA dropped to $3,376m (-35%), EBIT was $1,146m (-66%) due to the lower gain on the sale of assets ($122m vs $343m in H1 15) and share of profit in joint ventures ($59m vs $100m in H1 15). - Group net profit collapsed to $312m (vs $2,608m in H1 15) after a higher net financial result ($-275m vs $-151m in H1 15) and significant income tax ($-529m vs $-553m in H1 15). The operating cash flow was $1,190m (-68%) below net capex of $2,061 (-42%). Cash out-flows included acquisitions net of disposals for $-696m, the purchasee of owned shares for $-475m, and the dividend paid for $-953m. The financial situation was not alarming on 30 June 2016. Net debt amounted to $11.6bn and represented 34% of shareholders’ equity.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
N+1 Singer - Small-cap quantitative research - Momentum screen refresh + 10 focus stocks
12 Jan 17
We have refreshed our momentum style screen for the first time since inception on 26 July 2016. As before, the screen selects the 25 stocks exhibiting the most extreme momentum characteristics, according to our measurement method. From these we have selected 10 to focus on. Since inception the screen has underperformed both the main small-cap and micro-cap indices against a background of generally rising momentum. We have noted a subset of the basket, where decelerating momentum at the time of measurement appears correlated with significant share price falls since selection. We shall monitor this factor with the new screen, albeit there are only two such stocks showing this pattern, namely Lamprell (not rated) and Gear4music (not rated).
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.