A.P. Moller – Maersk to retain full ownership of Maersk Supply Service
The A.P. Moller – Maersk Board of Directors has decided to retain full ownership of Maersk Supply Service, the company said in its release.
The offshore support vessel industry, which Maersk Supply Service operates within, has over the last three years exhibited clear signs of distress, reducing company market capitalisations and lower asset values, negatively impacting the ability to find a sustainable ownership structure for Maersk Supply Service outside of A.P. Moller - Maersk. The industry continues to be characterised by oversupply, financial restructurings and consolidation and the market outlook for the industry is expected to remain subdued in the near and mid-term.
Maersk Supply Service’s strategy is focused on optimising the existing core business through time chartering out their assets, pursuing of new business as an integrated solution contractor, and by diversifying into new markets. The strategy is progressing well and in 2018 approx. 30 percent of Maersk Supply Service’s revenue were generated from new and diverse business, incl. offshore wind, ocean cleaning and deep-sea mining.
Maersk Supply Service has the last two years been progressing towards becoming a stand-alone entity and today operates almost fully independently and will continue to do so.
Maersk Supply Service was classified as discontinued operation and held as asset for sale in Q4 2017. The company will be reclassified to continuing operations and will be included in A.P. Moller – Maersk’s income statement, balance sheet and cash flow statement as part of the segment Manufacturing and Others. The reclassification of Maersk Supply Service will not affect A.P. Moller – Maersk’s guidance for 2019, as announced on 21 February 2019.
For the financial year 2018 Maersk Supply Service reported a revenue of USD 263m and an EBITDA of USD 3m with a negative free cash flow (FCF) of USD -316m due to the payment of four newbuildings. At the end of 2018 the Invested capital was USD 714m following a negative fair value adjustment of USD 400m recognized in Q3 2018. For 2019 the expectations are an EBITDA close to break-even level and a negative FCF of around USD -200m due to delivery of the remaining newbuildings ordered in 2014.