By Dominic Chopping and Costas Paris
Danish shipping and oil conglomerate A.P. Moller-Maersk A/S on Wednesday said it swung to a surprise second-quarter loss, as it wrote down the value of its tanker and ports assets, and warned of the impact of a major cyberattack in June.
The world's biggest containership operator said it would take impairments of $732 million in the quarter, mainly related to lower asset valuations for Maersk Tankers and commercial challenges in its APM Terminals business.
Maersk also warned that the cyberattack, which hit companies across the world in the last week of the quarter, would cost it between $200 million and $300 million. The company will register the hit in the third quarter, with the impact on second-quarter results minimal.
The attack brought down part of the company's IT system, with malware infecting networks used by its container businesses. That prompted system shutdowns that meant several of its shipping terminals across the world were unable to operate.
Customers were also prevented from making new bookings or receiving quotes, which led to lost revenue in July. Chief Executive Soren Skou said the financial impact relates to lost revenue, extra work during the attack and the cost of resolving the issue. "Business volumes were back to normal two weeks after the cyberattack," he added.
Mr. Skou estimates that Maersk Line lost out on carrying 70,000 40-foot containers during the first two weeks of July as customers had to use other firms. Maersk Line carried 2.7 million containers in the second quarter.
Despite the second-quarter loss and impact of the attack, Maersk maintained its full-year guidance of generating an underlying profit above the $711 million achieved in 2016.
For the quarter ended June 30, the group posted a net loss of $269 million, compared with a net profit of $101 million a year earlier. Revenue rose 8% to $9.6 billion. Analysts had expected a profit of $536 million on revenue of $9.64 billion, according to a FactSet poll.
The company's Maersk Line unit, traditionally its biggest earner, returned to profitability in the quarter as the market continued its emergence from one of the industry's worst downturns, with demand outgrowing capacity for the third consecutive quarter while average freight rates stormed higher.
The unit added around $500 million of profit in the quarter compared with last year, with the unit posting a second-quarter net profit of $339 million against a loss of $151 million.
"We are clearly out of the financial crisis and benefiting from solid economic growth driven by the U.S., Europe and China," Mr. Skou said. "Oil dependent economies like Russia and Brazil are no longer contracting, which is also good news."
Demand growth of 4% outgrew supply growth of 1.4%. Average freight rates increased 22% on the year and revenue improved by 21% in its Maersk Line unit compared with a year earlier, but the average fuel price a ton increased 61% to $313.
"In the first half, container demand was around 6%, twice the global GDP growth. This is a very positive development as demand is steadily above supply, driving up freight rates," Mr Skou said.
Maersk Oil also reported a rise in profit, boosted by a higher average oil price in the quarter of $50 a barrel compared with $46 last year. The division also benefited from lower costs.
Maersk said its Hamburg Süd acquisition is progressing as planned and should close in the fourth quarter.
Mr. Skou expects more consolidation in container shipping as smaller operators won't be able to compete with bigger players that have grouped into three main alliances to cut costs by sharing ships and port calls.
"Three years ago we had 20 global carriers, now we have 11 and in the future we will have five or six. The consolidation drive is not over," Mr. Skou said.
The company is continuing to evaluate the future of its energy unit, with a decision expected before the end of 2018. The four businesses within its energy unit -- Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers -- will either remain part of the group or be separated in the form of joint ventures, mergers or a listing.
The company is trying to reshape itself into a global supply chain player like United Parcel Service Inc. and FedEx Corp. The plan involves moving ore ships in and out of APM Terminals and moving more cargo inland through DAMCO, its supply-management division handling air freight, trucks and warehouses around the world.
Write to Dominic Chopping at dominic.chopping@wsj.com and Costas Paris at costas.paris@wsj.com
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