AP Moller-Maersk Group is expecting to take a $200-300m hit for its full year earnings in 2017 due mainly to lost revenue in July as a result of a crippling cyber-attack.
The negative results will be accounted in the transport and logistics business of the group, with the vast majority of the impact in Maersk Line. The container shipping business, however, has continued to project a full year underlying profit in excess of $1bn despite the cyber-attack impact.
The 2017 underlying profit for AP Moller-Maersk is also expected to be higher than the $711m recorded in 2016.
On 27 June this year, AP Moller-Maersk was hit by a malware known as NotPetya, distributed through a Ukrainian accounting software called MeDoc, used for filing tax returns in Ukraine.
The malware had impacted the container related businesses of AP Moller-Maersk including Maersk Line, APM Terminals and Damco.
The systems shutdowns at these divisions led to significant business interruption during the period, with limited financial impact in the second quarter, while the impact in the third quarter will be larger due to temporary lost revenue in July.
The cyber-attack was swiftly contained on 28 June, while operations for Maersk Line, Damco and APM Terminals started to normalised during the week of 3-9 July.
For the first half ended 30 June 2017, AP Moller-Maersk slipped into a loss of $11m, dragged down by impairments and poor performances mainly at the tanker shipping and terminal business units.
The loss was due primarily to post-tax impairments of $732m for Maersk Tankers by $464m and APM Terminals by $250m.
First six months revenue improved by 6.7% year-on-year to $18.57bn, predominantly due to higher average container freight rates and higher volumes and a 30% higher average oil price, partly offset by lower earnings in the offshore sector.
The biggest setback for the group was Maersk Tankers, which reported a six-month loss of $473m as against the gain of $76m in the year-ago period.
On the other hand, the largest revenue generator for the group, Maersk Line, returned to the black with a profit of $273m as against the loss of $114m in the year-ago period.
Looking ahead, AP Moller-Maersk’s expectation of an underlying profit above the $711m of 2016 is unchanged despite expected negative impact from the June cyber-attack.
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Source: Maersk
