A.P. MOLLER’S SHIPPING ACTIVITIES SUFFER PROFIT FALLS

A.P. MOLLER’S SHIPPING ACTIVITIES SUFFER PROFIT FALLS    Hit by lower freight rates, the container shipping, tanker shipping and related activities of A.P. Moller suffered a sharp fall in profits last year, to a combined result of DKK2.8 billion ($389 million), but the Danish group as a whole increased its profits.
   For the first time the Danish conglomerate published its consolidated results, instead of announcing partial results for certain holding companies and subsidiaries.
   What emerged from a detailed announcement on Thursday was that the giant shipping-to-retail group had revenues of DKK151.6 billion ($21.2 billion) in 2002, and assets of DKK170.6 billion ($23.9 billion). A.P. Moller increased its group net profit by 43 percent last year, to DKK12.1 billion ($1.7 billion), from DKK8.5 billion in 2001. While its oil and gas businesses and its retail activities returned improved results, shipping performed worse than in 2001.
   A.P. Moller revealed that container shipping and related activities (defined as inland transport, agencies, terminals and logistics) had DKK82.6 billion ($11.6 billion) of revenues in 2002, accounting for 54 percent of group revenues. A.P. Moller is the parent company of Maersk Sealand and Safmarine Container Lines. Tankers, trampers, offshore and other shipping activities had revenues of DKK16.2 ($2.3 billion) in 2002, representing 11 percent of A.P. Moller’s consolidated revenues. Shipyards, aviation, information technology and other industrial companies had 2002 revenues of DKK20.8 billion ($2.8 billion).
   Container shipping and related activities suffered a 67-percent drop in net profit, to DKK419 million ($59 million), from DKK1.3 billion in 2001. A spokesman for A.P. Moller would not disclose whether Maersk Sealand made a profit last year, although he confirmed that it lost money in the first half of 2002.
   Revenues from container shipping and related activities decreased by 4 percent in 2002, to DKK82.6 billion ($11.6 billion), from DKK85.9 billion in 2001. Profit before financial items declined by 25 percent, to DKK3 billion ($426 million).
   This is the first time that A.P. Moller has broken down its revenues and profits to the business segment level, although its container results also include inland transport, agencies, terminals and logistics.
   The tankers, tramper and off-shore shipping segment saw its net result fall by 34 percent last year, to DKK2.4 billion ($330 million), as revenues decreased by 13 percent, to DKK16.2 billion.
   A.P. Moller reported that container freight rates declined significantly in the first half of 2002, before stabilizing and increasing on certain routes.
   “After a slow beginning of 2002, the container services had higher volume growth than previously expected,” A.P. Moller said. Maersk Sealand’s freight volumes increased by about 8 percent last year.
   The group said that the agencies of Maersk Sealand, including trucking and depot activities, achieved “a satisfactory result,” while the result of Maersk Logistics for 2002 was “higher than that of 2001, though still modest.” APM Terminals improved its operating result in 2002, to an undisclosed amount.
   Per Moller, executive vice president of A.P. Moller, said that it was too early to say whether the container shipping market has now witnessed a recovery.
   Moller told American Shipper that container volumes have been strong since the beginning of 2003, but “times are very uncertain.”
   A.P. Moller is continuing to work towards a merger of its main stockmarket-listed arms — “Aktieselskabet Dampskibsselskabet Svendborg” and “Dampskibsselskabet af 1912 Aktieselskab.” The board of directors expects to submit the merger proposal to an extraordinary meeting of shareholders before June.
   Following the announcement of the group’s annual results, A shares in A.P. Moller’s Dampskibsselskabet Svendborg listed arm were unchanged, at DKK72,000.