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AP Moller Maersk, the diversified shipping, oil, container and logistics group, has reported a profit of US $3,462 mn for 2008 which is marginally higher than US$ 3,422 mn reported for 2007 and in accordance with the expectations most recently stated in the stock exchanges, the company said.

Compared to 2007, the profit for the year is characterised by:operational improvement in most of the Group’s business units, well above 2007, although towards the end of the year affected by the global economic slowdown. The net profit for the year was affected by significantly lower profit from Danske Bank and impairment losses on goodwill on shares in Danske Bank and on other non-current assets.

High average oil prices and in total a larger production share affected Oil and gas activities positively and the overall net result was significantly higher than in 2007, despite increased operational and exploration costs, as well as impairment losses due to lower oil prices at the end of 2008.

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Operationally, the container activities improved considerably during 2008, while difficult market conditions, especially in the second half of the year, had a negative impact on the profit. Profit before gains on sale of ships, etc. and non-recurring costs relating to streamLINE were slightly above 2007, but still not satisfactory, AP Moller Maersk said in a release.

Consolidated cash flow from operating activities increased by 17% to USD 8,524 million corresponding to DKK 43,422 million (2007: USD 7,313 million corresponding to DKK 39,820 million) – positively affected by higher earnings before depreciation and amortisation; especially in the oil and gas activities.

The total cash flow used for capital expenditure was USD 10,281 million corresponding to DKK 52,375 million (2007: USD 9,000 million corresponding to DKK 49,003 million).

Outlook for 2009
For the A.P. Moller - Maersk Group overall, a result excluding gains on sale of ships, rigs, etc. is expected to be significantly below 2008 which was USD 2.6 billion.
With the present market situation it is not realistic to expect gains on sale of ships, rigs, etc. of any significance.

The outlook for 2009 is subject to considerable uncertainty, not least due to development in the global economy. Specific uncertainties relate to the development in container freight rates, transported volumes, the USD exchange rate and oil prices, the company press release said.

Container shipping and related activities showed a moderately positive result slightly above 2007. The result was negatively affected by significantly higher fuel costs, although to a larger extent than previously compensated for by fuel surcharges on freight rates. Increasing freight rates in the first half of the year affected the result positively. Freight volumes in major trades fell in the last quarter of the year, causing rates to develop negatively.

The streamLINE initiatives launched in January 2008 entailed non-recurring costs of USD 245 million. The initiatives are expected to take full effect over the coming years. The consolidated profits from Tankers, offshore and other shipping activities were somewhat below 2007, primarily due to lower gains on sale of ships and rigs and impairment losses on the investment in Höegh Autoliners.

Maersk Tankers continued the expansion and renewal of its fleet. The profit excluding sales gains was above 2007, but including sales gains somewhat below. The markets for the offshore activities of Maersk Drilling, Maersk FPSOs and Maersk Supply Service were favourable in 2008. The profit excluding sales gains was well above 2007.