Maersk focuses investments on petroleum and ports

The Danish firm A.P. Moller-Maersk is increasing its investments in oil, port operations and drilling to reduce its exposure to the container shipping industry, which is expected to remain a victim of overcapacity and economic stagnation.

Maersk Line, the container shipping division of AP Moller-Maersk, returned to profit in the second quarter, but has struggled for years with lower rates in the transport sector and a glut of vessels, a trend that will continue, it said.

A change in strategy would generate “significant” investments in areas such as oil exploration, the group said on October 9, after opening its doors for the first time in its 108-year history to analysts, investors and media.

The other three core businesses of the group – Maersk Oil, APM Terminals and Maersk Drilling – will benefit in the future from 50 percent of total investment of the group from the current 34 percent, the firm said.

Its Maersk Oil unit, in particular, will receive substantial investment, the company added. “The group faces significant investments to make our business grow, and has unused credit lines for $10,000 million,” said Chief Financial Officer, Trond Westlie.

Meanwhile, investment in Maersk Line will be reduced by 25 to 30 percent from the current 38 percent.

“We will aim for more stable results,” said the firm’s chief executive, Nils Smedegaard Andersen, who added that Maersk Line “will remain a volatile business.”

“We will continue to see an overcapacity of ships for some years,” he said. It is expected that APM Terminals and Maersk Drilling will contribute each $1,000 million to the group’s results in five years, the company added.

These units contributed $600 and $500 million, respectively, of the $3,400 million reported by the group in profits last year, while Maersk Line recorded losses of $600 million and Maersk Oil earnings of $2,100 million.