Maersk companies hit by oil downturnCompany News // February 11, 2016
Maersk says its results have been adversely affected by the downturn in the offshore oil and gas industry.
The company said that, after a satisfactory result in the first half of the year, Maersk Group was severely impacted by a widening supply-demand gap across most of its businesses, leading to significant oil price and freight rate reductions. The group’s oil related businesses were affected by the increasing oil supply-demand gap combined with a significant increase in oil supply from especially US shale and OPEC production. This resulted in a continued oil price decline in the second half of 2015, leading to significant layoffs and reduction of activities across the global oil industry.
"The group reacted to the unexpected challenges by trimming our businesses through accelerating and initiating further costreduction initiatives across all our businesses, cancelling sailings and laying up vessels in our shipping businesses, reducing our oil exploration activities as well as reviewing, postponing and cancelling investments across our businesses," said Maersk. "We further strengthened our focus on delivering value to our customers
and ensuring our fair share of activities.
Maersk Supply Service saw a fall in underlying profit of US$117 million (US$189 million). It reported a profit of US$147 million and a ROIC of 8.5 per cent (11.9 per cent). The underlying profit was US$117 million (US$189 million). Revenue for the year decreased to US$613 million (US$778 million) following lower rates and lower utilisation as well as fewer vessel days available due to divestments and lay-ups.
Reduce revenue was partly mitigated by significant cost reductions with total operating costs at US$345 million (US$430 million).
The continued market decline in the offshore industry led to a number of vessel lay-ups globally, including Maersk Supply Service with nine vessels laid up at the end of the year. As a consequence, Maersk Supply Service announced during the year the need to adjust the crew pool by more than 300 offshore positions and a 15 per cent reduction in headquarter positions.