Maersk To Buy Back Shares For First Time, Earnings Rise



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Moller-Maersk announces the first share buy-back in its 110-year history as an overhaul of the sprawling shipping and oil empire leaves it with more cash than it can usefully invest.

Reuters

COPENHAGEN, Aug 19 (Reuters) - Denmark's A.P. Moller-Maersk announced the first share buy-back in its 110-year history on Tuesday as an overhaul of the sprawling shipping and oil empire leaves it with more cash than it can usefully invest.

Maersk shares jumped 5 percent after the company reported better than expected quarterly earnings and raised its 2014 profit guidance, as cost cuts at its container shipping arm help it navigate weakness in the global economy.

"The share buy-back programme ... further underlines that the company has increased its focus on shareholders - this is a great signal," said Sydbank analyst Jacob Pedersen.

Maersk will buy $1 billion of its shares in the 12 months from Sept. 1 and said it would consider more buybacks later.

The largest container shipping company in the world and Denmark's second-largest company by market capitalisation suffered its first ever full-year loss in 2009 as the global economy slid into recession.

Under pressure to prove its diversified business model can work for shareholders, it has slashed costs and moved to focus on four businesses - container shipping, port terminals, oil exploration and production and oil drilling.

The conglomerate once owned businesses as varied as supermarkets, a small airline and liquefied natural gas tankers.


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