A.P. MOLLER WARNS OF LOWER PROFIT

A.P. MOLLER WARNS OF LOWER PROFIT    Denmark’s A.P Moller, the parent company of Maersk Sealand, has warned that profits from its shipping activities this year will be negatively affected by changes in the world economy and the impact of the events on Sept. 11.
   “Since the publication of the interim report on Aug. 28, 2001 the companies (of the group) have experienced unforeseen negative changes,” the Danish group said.
   Eivind Kolding, chief financial officer of A.P. Moller, said that profitability prospects for container shipping and dry bulk shipping activities of the group are worse than expected, but profit forecasts remain unchanged for its tanker shipping and offshore shipping businesses.
   “On several important services, the container vessels have experienced a stronger decline in freight rates and a weaker development in cargo volumes than anticipated,” the group said. “For dry bulk carriers the rate level is also lower than expected,” it added. Other areas within the shipping activities and the oil and gas activity have developed as expected.
   For the combined shipping activities — representing the combined businesses of A.P. Moller’s A/S Dampskibsselskabet Svendborg and Dampskibsselskabet Af 1912 A/S shipping companies and those of the “Tankers and Liners” partnership — the result before exchange rate adjustments and other special items for 2001 is now expected to be “somewhat below that of year 2000.” Last year, the result before exchange rate adjustments and other special items amounted to 3.9 billion krone ($515 million), up from DKr2.8 billion in 1999.
   A.P. Moller had previously said that it would slightly improve on its 2000 shipping business result this year.
   However, the overall result for 2001 for both the shipping arm of the group and the oil and gas activity, before exchange rate adjustments and other special items, is expected to be “slightly above” that of year 2000, which was DK9.7 billion ($1.2 billion).
   Despite the warning of lower results from shipping, Kolding said that A.P. Moller’s shipping activities will report a net profit this year.
   A.P. Moller’s profit warning follows an announcement last month by Neptune Orient Lines, the parent company of APL Liner, that it may report a loss this year.