Oil write down hits Moller-Maersk profits

“Given our expectation that the oil price will remain at a low level for a longer period, we have impaired the value of a number of Maersk Oil’s assets by $2.5 billion after tax”, Andersen said.

Looking ahead to 2016 Maersk said it expected its underlying full year result (excluding impairments) to be significantly under the $3.1bn in 2015.

Global trade is expected to have grown between 0% and 1% in 2015, compared with double-digit growth before 2008, while trade is forecast to grow between 1% and 3% this year, a figure which would be below the post-crisis average of between 4% and 5%.

Container terminals arm APM Terminals faired better although still full year profits reduced $654m in 2015 compared to $900m a year earlier.

The container shipping division, Maersk Line, made a profit of 1.3 billion dollars in 2015, down from 2.3 billion dollars profit in 2014, owing to lower container freight rates across all trades except North America.

The company noted that results were severely impacted by a widening supply-demand gap across most of its businesses, leading to significant oil price and freight rate reductions.

The move came shortly after Maersk Oil announced it would slash its workforce by between 10 and 12 per cent in the face of low oil prices.

That was because it wrote down the value of its oil assets by that amount.

The drilling and rig business delivered 751 million dollars profit, up from 478 million dollars a year ago.

Maersk Line announced a cost cutting programme in November, saying it would cut 4,000 jobs by the end of 2017 and defer vessel investments to buoy up its dominant position in a falling market.

The group also warned that the guidance for 2016 is subject to considerable uncertainty, not least due to developments in the global economy, the container freight rates and the oil price.

Shares in A.P. Moller-Maersk have dropped 50 percent since April previous year.