Maersk Oil Profit Sank 86% Last Quarter as Prices Plunge

Photo: Maersk Oil via Flickr

Christian Wienberg

(Bloomberg) — A.P. Moeller-Maersk A/S, Denmark’s biggest company, said profit at its oil unit dropped 86 percent in the third-quarter as energy prices fell.

Maersk Oil’s net operating income after tax for the three months through September was $32 million, down from $222 million in the same period a year earlier, the Copenhagen-based company said in a statement on Friday.

“We’re noting that the development in Maersk Oil is weaker than expected,” Jesper Grandjean Bamberger, senior equity specialist at Nordea, said in a note. “That can put a bit of pressure on the stock today. We advise caution when it comes to buying the share, even if the pricing is tempting.”

Maersk Oil said on Oct. 26 it’s cutting as much as 12 percent of its global workforce as it tries to reduce costs by 20 percent by the end of 2016. The unit has also been struggling with declining output in recent years as its fields mature and some of its new investments have disappointed.

The group’s Maersk Line division, the world’s largest container shipping company, reported a 61 percent drop in third- quarter profit amid falling freight rates. Maersk said on Oct. 23 the container market was doing worse than expected and cut its 2015 forecast for the group’s underlying profit by 15 percent to $3.4 billion.

Maersk Line said on Nov. 4 it will cut as many as 4,000 jobs, scale back capacity and delay investments to cope with a weaker container market.

©2015 Bloomberg News

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