Maersk: Splitting company in two ‘one of many options’

Louise Muenter, head of media and stakeholder relations at A.P. Moeller-Maersk, said a corporate restructuring is a possibility following a report the Danish shipping conglomerate could be split into separate transportation and energy companies.    A.P. Moeller-Maersk A/S could be split into two separate companies as a result of a strategic review, according to head of media and stakeholder relations Louise Münter.
   Münter said a corporate restructuring is a possibility following a report the Danish Shipping conglomerate could be split into separate transportation and energy companies.
   “We don’t want to comment on or anticipate the outcome of the investigation the board of directors has asked management to initiate,” she said in an e-mail Friday. Münter said the purpose of the internal review was to “evaluate how the company’s agility and synergies can be further strengthened to ensure future growth.
   “As the chairman of the board has communicated, all options are being evaluated,” she said. “The structure of the group is one of many options being evaluated, but it is important to point out that it is one of many possibilities, as structure alone doesn’t ensure growth.”
   According to a report in the Danish newspaper Berlingske Business, the restructuring will likely involve the creation of two separately listed companies: “Maersk Transport” and “Maersk Energy.”
   The report cited a source close to the discussions, who said the new Maersk Transport would comprise container carrier Maersk Line, port terminal operator APM Terminals, bulk carrier Maersk Tankers, freight forwarder Damco and marine safety and support services provider Svitzer, while Maersk Energy would include Maersk Oil, Maersk Drilling and Maersk Supply Service.
   Analysts with investment firm Jeffries said in a client note earlier this week they expect the outcome of the review to be “drastic,” in part because new Chief Executive Soren Skou is still serving as the head of Maersk Line following the June departure of former Group CEO Nils Smedegaard Andersen. The company’s shipping and transportation businesses account for 65 percent of Maersk’s net asset value, while energy represents the other 35 percent, according to Jeffries.
   “We think Damco and Maersk Tankers are likely divestment candidates, with an estimated value of $4 billion (7 percent of NAV), while a more drastic break-up scenario in shipping (65 percent of NAV) and energy (35 percent) should not be ruled out, after Maersk Oil lost the license for the Al Shaheen oil field in Qatar (>40 percent of current production),” said Jefferies analyst David Kerstens.
   Maersk last week reported group earnings in the second quarter plummeted 89 percent year-over-year to $118 million as Maersk Line recorded an operating loss after tax of $151 million compared with a $507 million profit in second quarter 2015.
   Then Maersk Supply Services said earlier this week it would sell up to 20 offshore supply vessels and cut as many as 400 employees in the next 18 months due to “unprecedented market conditions.”
   “The divestment plan is a response to vessels in lay-up, limited trading opportunities and the global over-supply of offshore supply vessels in the industry,” the company said in a release.
   “One of Maersk Supply Service’s prime objectives is to attempt to restore the supply demand balance in the offshore supply market,” Maersk Supply Service CEO Jørn Madsen said. “This is why the vast majority of the divested vessels will be recycled or modified by their new owners to compete outside their present segments.”
   Münter said the company will complete and announce the result of its internal review by the end of the third quarter of 2016.