Rough sailing for Maersk in second quarter

Oil and shipping giant struggling on all fronts

The Danish oil and shipping giant Maersk is under pressure on all fronts, according to its freshly-published financial results for the second quarter.

Encumbered by low growth and falling prices in nearly all its markets, Maersk produced an underlying profit of about 894 million kroner – a result that Maersk CEO Søren Skou described as “unsatisfactory”.

“Cost reductions and operational optimisations, however, made a significant contribution to mitigating the impact of the negative market conditions. Maersk Oil has reduced operational costs by 25 percent, upholding a break-even at 266-300 kroner per barrel,” said Skou.

“The costs in Maersk Line have been reduced to an all-time low level and are under 13,340 kroner/FFE for the first time. To ensure the future strength, profitability and development of new growth opportunities of the company, the board of directors has initiated a strategic review of the company and will report on progress of the review before the end of Q3, 2016.”

READ MORE: Maersk lays off 122 following loss of rig contract

Expectations unchanged
The continuing low oil prices and average container freight rates were among the parameters which had a negative impact on the company’s financial result.

Despite the disappointing midterm results, Maersk’s expectation for 2016 remains unchanged.