COPENHAGEN, Denmark, Aug. 12 (UPI) -- Danish shipping and oil company A.P. Moller-Maersk said its revenue declined more than 10 percent in the second quarter because of the decline in oil prices.
The group said its profit of $134 million for the second quarter was "significantly lower" than the same period last year and revenue declined 16 percent year-on-year to $1.7 billion because of a 24 percent decline in freight rates and a 26 percent decline in crude oil prices.
Its oil division in May announced plans to cut about 40 positions from its regional offices. Despite efforts to cut costs already, the company said lower oil prices continued to put pressure on its earnings. In its quarterly statement, the company said Maersk Oil had a strong record in operational performance.
"Cost reductions are progressing ahead of plan with closure of the offices in Brazil and the United States as well as headcount reductions primarily in our headquarters, Kazakhstan, Norway, the United States and Angola," the company said.
The oil division suffered a blow in June when it was passed over for a joint venture opportunity in the al-Shaheen oil field in Qatar. The company is redeploying staff in Qatar to other sections of its global portfolio.
Maersk Oil made a profit of $102 million, against $345 million this time last year, but said its equity production was higher by more than 10 percent. It expects to break even if the price of oil ranges between $40 and $45 per barrel, relatively on par with recent trends. Exploration costs, meanwhile, are expected to come in well below last year.
The company in June advanced on a restructuring plan by sidelining top executives and suggesting it could split off its business units into separate groups. In its latest statement, the company said its strategy remains unchanged until the strategic review is finalized.