Misery for Maersk

Heavy losses from its container line and significantly lower profit from its other key units will plunge AP Moller-Maersk over $850m into the red this year, Fearnley Fonds warns.

Analysts Rikard Vabo and Lars Erich Nilsen say recent developments in the container and oil and gas markets have increased the likelihood of the Danish giant slumping to a loss in 2009 from “possible to probable”.

In a note to clients the pair wrote: “We estimate a negative group net income of $858m (for 2009) mainly driven by a loss of $1.9bn from containers (2008: $104m).”

“For the Oil and Gas segment we expect an oil price of $50/bbl and an unchanged oil production, which we believe will generate a net income of $940m ($2.3bn).”

Vabo and Nilsen, who have a “sell” rating on AP Moller, add income from its tankers, offshore and other shipping activity will also tail off this year.

The unit is expected to post a profit of $189m, well down from the $458m seen in 2008, they say.

The Fearnleys pair also sliced their target price for AP Moller from DKK 20,000 ($3,412) per share to DKK 16,000 after the shipowner warned its 2009 figures would come in “significantly below 2008”, which stood at $2.6bn.

It added: “With the present market situation it is not realistic to expect gains on sale of ships, rigs, etc of any significance.”

AP Moller presently has a market capitalisation of $16bn, which is equal to around 8% of Denmark’s GDP. Its enterprise value presently stretches to $64bn, or 30% of Denmark’s GDP, according to figures obtained by TradeWinds.

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