November 7, 2017 - A.P. Moeller-Maersk AMKBY -7.23% A/S booked a quarterly loss, hurt by a recent cyberattack and an impairment charge on its offshore oil-exploration unit, but executives predicted a stronger performance as a shipping-industry recovery takes hold.
The Danish shipping and oil conglomerate posted a third-quarter net loss of $1.56 billion, compared with a profit of $429 million a year earlier. Revenue rose 14% to $8.06 billion from $7.07 billion.
Maersk shares in Copenhagen fell more than 6%.
The bottom line reflected the effects of a $1.75 billion impairment in Maersk Drilling and a $250 million to $300 million hit from a cyberattack in June that left the company’s shipping unit reeling for weeks. Maersk plans to spin off the drilling unit, which operates oil and natural-gas rigs mainly in the North Sea. Over the past year, the company has been paring back its energy businesses, including its Maersk Oil and Maersk Tanker divisions.
The cyberattack brought down the company’s computer systems, with malware infecting networks used by its container businesses. That prompted system shutdowns that meant several of the company’s shipping terminals around the world were unable to operate.
Maersk said it moved 130,000 fewer containers because of the attack, and analysts estimate it lost another 260,000 containers worth of bookings. Maersk Line, the group’s shipping unit and the world’s biggest container operator, moves more than five million, 20-foot containers every quarter.
“We were not able to grow with the market because of the attack,” Chief Executive Soren Skou said in an interview. “But market fundamentals are quite strong with a solid [annual] growth of 5% and we can restore our performance in coming quarters.”
Mr. Skou said Maersk is investing tens of millions of dollars to limit the damage of another attack by improving its information-technology defenses. “All businesses are subject to cyberattacks, some of which are state-sponsored,” he said. Thousands of companies were affected by the attack, he said. “This is not the work of teenage kids in a garage.”
Container shipping, which moves the vast majority of the world’s manufactured goods, is emerging from one of the worst industry downturns, with demand outgrowing capacity for the third consecutive quarter.
Maersk Line, which contributes more than half of the group’s revenue, made a $211 million underlying profit for the quarter, compared with a loss of $122 million a year earlier. Freight rates rose 14%r, but volumes dropped 2.5% because of the cyberattack. Fuel costs rose 26%.
Source: The Wall Street Journal