A.P. Møller-Mærsk A/S, the largest container ship and supply vessel operator in the world since 1996, reported fourth-quarter earnings mostly in line with expectations. But a warning the Danish firm issued that said profits must improve in 2019 sent its shares plunging more than 10 percent.
The company's earnings before interest, tax, depreciation, and amortization (EBITDA) came in at $1.12 billion for the final three months of 2018. This amount was slightly higher than the $1.07 billion forecast by analysts.
Maersk expects 2019 EBITDA to hit some $5 billion as calculated under the International Financial Reporting Standards (IFRS). That total will fall to around $4 billion excluding the effects.
Analysts on average, however, expected 2019 EBITDA at $5.32 billion, said Reuters. It remains unclear if this total includes the effects of IFRS. They said there are a slight disappointment and a little confusion about the numbers which gives a relatively high share drop.
"Although we had a challenging start to 2018, looking at our financial performance, we increased earnings despite significantly higher bunker fuel prices and lower than expected container volume growth in the second half of 2018," said CEO Soren Skou.
"However, profitability needs to improve," he added.
Skou also said margins in continuing operations were challenged. He noted that EBITDA was lower than initially expected at the beginning of the year. This was primarily due to an increase in bunker fuel prices not fully recovered by higher freight rates.
Maersk, however, said its guidance for 2019 is subject to considerable uncertainties. These uncertainties are due to the current risk of further restrictions on global trade, plus other factors impacting container freight rates, bunker prices, and foreign exchange rates.
It warned the long-running trade war between the U.S. and China will hamper growth in 2019.
In September 2016, Maersk announced splitting into two separate divisions: transport and logistics and energy. It announced last year it will spin off its offshore drilling operation and list it in Copenhagen. Maersk said the first day of trading for the new company will be April 4.
