Maersk reports 84% drop in profit

Maersk reported an 84 per cent plunge in 2015 profit after its oil unit was hit by lower energy prices and its container division got squeezed between sluggish trade growth and overcapacity.

Maersk said net income was $791 million last year compared with $5.02 billion in 2014. That compares with a median estimate of $3.7 billion in a survey of 16 analysts.

The result includes a writedown in the value of Maersk’s oil assets by $2.6 billion, the company said.

“Given our expectation that the oil price will remain at a low level for a longer period, we have impaired the value of a number of Maersk Oil’s assets,” chief executive Nils Smedegaard Andersen said in the statement. “We will continue to strengthen the group’s position through strong operational performance and growth investments.”

In October, Maersk started cost cut programs for both of its two biggest units to address what analysts have described as a perfect storm for the conglomerate.

Maersk said Wednesday that 2016’s underlying profit will be “significantly below” last year’s $3.1 billion. – Bloomberg