APM Terminals Remains in the Red in Q3
Market headwinds coupled with overcapacity woes have kept APM Terminal’s business performance in the red with the terminal operator booking a loss of USD 267 million in the third quarter, against a profit of USD 131 million from a corresponding quarter year earlier.
The additional costs related to the cyber-attack have also exerted further pressure on the company’s earnings.
APM Terminals posted a loss of USD 100 million in the second quarter of 2017 amid impairments of USD 250 million from some of its financially troubled terminals.
“The reported loss was impacted by impairments of USD 374 million related to terminals in markets with challenging commercial conditions,” the company said.
The terminal operator recorded an underlying profit of USD 110 million (USD 126 million), also negatively impacted by the challenging market conditions in the industry.
Revenue of USD 1.0 billion was hit by the loss of service in North America partially offset by volume increase in other markets.
Average terminal utilisation was 64% and 68% down from 70% when excluding the terminals that have started operation this year, Lázaro Cárdenas, Mexico, Izmir, Turkey and Quetzal, Guatemala.
APM Terminals’ volume was 6.5% higher at 10.2m TEU (9.5m TEU) weighted by the share of equity in each terminal, mainly due to strong volumes in Rotterdam, the Netherlands, joint venture terminals in China and terminals that have started operation this year.
Operating business generated an underlying profit of USD 117m (USD 131m), while projects under implementation realised an underlying loss of USD 7m (loss of USD 5m) stemming from start-up costs. The share of profit in joint ventures and associated companies was a loss of USD 182m (profit of USD 57m), impacted negatively by impairment in joint venture terminals.
During the quarter, APM Terminals inked a deal to divest the majority shareholding in APM Terminals Zeebrugge, Belgium to COSCO SHIPPING Ports. The transaction is expected to be finalised in Q4 subject to customary regulatory approvals and with only a minor financial impact.
Speaking of the market, the terminal operator pointed to the signs of stability on the East-West Network with the networks of major alliances in place.
“While APM Terminals lost some services following the changes in alliances, volumes are now positively impacted following the extension of 2M with HMM, and Hamburg Süd participation on some services,” the company said.
For the nine-month period, APM Terminals reported a loss of USD 276 million, reversing from a profit of USD 351 million booked a year earlier.