COST OF SEA-LAND TAKEOVER HITS A.P. MOLLER’S RESULTS

CUSTOMS TO INSTALL STOLEN AUTO RECOVERY SYSTEM AT JACKSONVILLE    Denmark’s A.P. Moller group, the parent company of Maersk Sealand, reported a lower group net profit of DKr 2.07 bilion ($286 million) for 1999 as the cost of implementing the takeover of Sea-Land Service’s international business and adverse exchange rate adjustments hit its botttom line.
   The 1999 result compares to a net profit of DKr2.94 billion in the previous year.
   The figures represent the combined results of A.P. Moller’s A/S Dampskibsselskabet Svendborg and Dampskibsselskabet Af 1912 A/S shipping companies and those of the “Tankers and Liners” and “Oil and Gas Activity” partnerships.
   In 1999, the group incurred a charge of DKr1.2 billion ($166 million) for the Sea-Land takeover implementation and negative exchange rate adjustments of DKr1.07 billion ($147 million). In the previous year, there was no implementation charge and the exchange rate adjustment had been a profit of DKr207 million.
   Before the Sea-Land implementation charge, A.P. Moller reported a combined profit of DKr3.27 billion ($452 million) for 1999, as compared to DKr2.94 billion in 1998.
   Result before gains on disposals and special items was DKr5.77 billion ($798 million) last year, up from DKr3.37 billion in 1998.
   Revenues increased by 15 percent during the year, to DKr49.01 billion ($6.78 billion), from DKr42.77 billion in 1998.
   A.P. Moller said that the increase in revenues was due mainly to liner activities. The business taken over from Sea-Land Service, however, had no significant influence on revenues, as the acquisition was completed on Dec. 10, 1999.
   The Danish group, which does not disclose the results of Maersk Line separately, said that 1999 saw a general increase in total cargo volumes for container vessels. “Average rates were below those of 1998, but owing to effective cost control and the increased cargo volumes the result was above that of 1998,” the company said.
   The group’s tanker, gas carrier and dry bulk activities experienced unfavorable market conditions last year, while its car carriers business had a satisfactory result, it added.
   The “Tankers and Liners” partnership arm of A.P. Moller posted a net profit of DKr236 million ($33 million) for 1999, down 82 percent from the DKr1.32 billion profit of 1998.
   Before a DKr560 million ($77 million) Sea-Land implementation charge, the tankers and liners arm made a profit of DKr796 million ($110 million) last year, down from DKr1.32 billion in 1998.
   However, the result before interest, bareboat expenses and exchange rate adjustments, but after depreciation and write-downs, increased to DKr2.66 billion ($368 million) in 1999, from DKr1.74 billion in 1998.
   Revenues for tankers and liners increased by 15 percent last year, to DKr42.55 billion ($5.88 billion), from DKr36.99 billion in 1998.
   A.P. Moller said that about half of the assets acquired through the takeover of Sea-Land have been incorporated into the tankers and liners arm of the group, with other assets put into various group companies, mainly in the U.S., the United Kingdom and Singapore.