Maersk attains 14% growth in 1st half 2005

Despite the negative factors of a lower US Dollar exchange rate and higher oil prices, the A.P. Moller-Maersk Group achieved growth in net revenue, result before tax and total result in the first half of 2005.

The group said net revenue in the first half of 2005 was DKK 88,041 million as compared to DKK 76,939 million in the same period in 2004, showing an increase of 14%. In US Dollar, the increase was 20%.

On result before tax, it was DKK 16,542 million against DKK 14,470 million between the two periods, or an increase of 14% in terms of DKK and 20% in terms of US Dollar.

Total result for the January-June period 2005 was DKK 10,760 million as compared to DKK 10,197 million in the like period in the previous year. In terms of US Dollar, it was US$1,856 million and US$1,683 million respectively between the two periods.

The group listed the following factors that affected the performance in the first half of 2005 as against the same period in 2004: A US Dollar exchange rate, which on average was 5% below that of the first half year in 2004 with negative effect on the revenue in DKK and the operating result for the period.

Better rates and increased volumes for container services. 40% higher oil prices in US Dollar, partly neutralized by oil price hedging. Negative exchange rate adjustment under financial items approx. DKK 1,200 million as a consequence of the increase in the US Dollar rate from January 1 to June 30, 2005.

Higher government share and taxes in the oil and gas activities. In the first half year 2004, a positive non-recurring effect on reduction of deferred tax as a consequence of the merger with leasing companies previously owned by the Dansk Supermarked Group.

As of January 1, 2005 Danske Bank is an associated company. The share of the result in Danske Bank is DKK 1,214 million. In the first half year 2004, received dividend and value adjustment, after tax, was DKK 589 million and DKK 363 million respectively.

On the group's container shipping and related activities, Maersk Sealand said the growth in world trade continued in the first half year 2005 and led to increased volumes and freight rates compared to the same period in 2004.

In the first half year the demand for vessel capacity was so high that it exceeded the growth in the world fleet. As a consequence, it said, rates for chartered container vessels increased from an already high level, while fuel prices also rose resulting in increased operating expenses for the shipping lines. In addition, the lower US Dollar exchange rate also contributed to increased costs.

Maersk Sealand said it had made a number of changes in the service network to better fulfil customer demands. The situation in 2004 with port delays, especially on the U.S. West Coast, seems to be overcome, and schedules are improving on the U.S. West Coast and in general.

The total result before tax for Maersk Sealand's container services was well above that of the first half year in 2004. In the first half year of 2004, taxes were positively affected by reduction of deferred tax as a consequence of the merger with leasing companies previously owned by the Dansk Supermarked Group, it said.

Maersk Sealand said that in the first half year one new container vessel was delivered, and a number of vessels, including newbuildings, entered the operating fleet through charter. The number of containers increased during the first six months due to a large number of newbuilt dry and reefer containers, the latter from Maersk Container Industri in Denmark and China.

For the A.P. Moller-Maersk Group total revenue - including the effect of the purchase of Royal P&O Nedlloyd N.V., and excluding discontinued operations - is expected to be about 25% above that in 2004 of DKK 162 billion.

With freight rates, oil prices and exchange rates at the present level, the result after tax for 2005 is expected to be in the order of DKK 23 billion compared to the previous announcement of about DKK 20 billion, the group said.

On August 11, 2005, A.P. Moller-Maersk A/S acquired more than 95% of the shares in Royal P&O Nedlloyd N.V. As of this date, the Royal P&O Nedlloyd Group is a part of the A.P. Moller-Maersk Group.

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