Danish shipping group A.P. Moller Maersk reported third quarter core profit below expectations on Tuesday and said it now expects only a positive underlying profit, backing away from a previous forecast. Kate King reports.
Earlier this year Danish shipping giant A.P Moller Maersk ventured in a different direction. It agreed to sell its oil and gas business to focus on transport and logistics. But after posting a third quarter profit below expectations - investors may now start asking questions. (SOUNDBITE) SEVEN INVESTMENT MANAGEMENT, MARKETING DIRECTOR, JUSTIN URQUHART-STEWART, SAYING: "It's very difficult in the shipping business to try and adjust your costs really quite quickly because you build the ships during the good times then you find you've got excess capacity during the weak times and then you just got dead metal hanging around floating around. So really by tying themselves purely to this logistics shipping logistics they're narrowing their field whereas actually they probably should have actually broadened out further so that during the weaker times they have other legs to stand on for the moment that's going to be looking rather weak in this position." Shares slipped more than 5 percent due to the soft performance. Maersk blames the drop on a cyber attack in June - which disabled its systems and prevented it from taking new orders for 12 days. It says that wiped as much as 300 million dollars off profits. Container freight rates were also worse than expected - although there's been strong volume on the key east-west trades. It all means Maersk has revised down its full year guidance for underlying profit at its container business - it may not make $1billion. Adding to its woes, the recent bounce-back in oil prices which are likely to push up fuel costs for the entire maritime industry.