A.P. Moller-Maersk A/S (MAERSK-B.KO) reported a 16% rise in first-quarter net profit as a higher oil price bumped up profits at its energy business but higher bunker-fuel costs weighed heavily on its shipping unit.
The Danish conglomerate, which owns Maersk Line, the world's biggest container operator, saw shipping market fundamentals continue to improve with demand outgrowing supply for the second consecutive quarter. Average freight rates increased 4.4% and revenue improved by 10% compared with a year earlier, but the average bunker price increased 80%, it said.
Maersk Oil saw profits boosted by an average oil price in the quarter of $54 a barrel compared to $34 last year, while cost reductions and lower exploration costs and a one-off tax of income also contributed.
The group's net profit for the quarter ended Mar. 31 was $245 million, compared with $211 million a year earlier. Revenue rose 5% to $8.96 billion.
Analysts had expected a net profit of $204 million on revenue of $9.13 billion, according to a poll by FactSet.
A.P. Moller-Maersk still forecasts full-year underlying profit above the $711 million achieved in 2016 with gross capital expenditure still seen at $5.5 billion-$6.5 billion.
The Hamburg Süd acquisition is progressing as planned toward a closing in the fourth quarter, the company said.
Further, a decision on plans for its energy unit will be made before the end of 2018. As reported earlier, the four businesses within the Energy unit--Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers--will either remain part of the Maersk group or be separated in the form of joint ventures, mergers or a listing.
-Write to Dominic Chopping at firstname.lastname@example.org; Twitter: @domchopping @WSJNordics
(MORE TO FOLLOW) Dow Jones Newswires
May 11, 2017 03:26 ET (07:26 GMT)