A part of Watch Media

ShippingWatchWednesday8 February 2023

  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Search
  • Log in
  • Latest
  • Search
  • Log in
  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
05/01/2015at 14:37

Maersk's Russian port company plummets on the stock exchange

The share of Russia's biggest port company, Global Ports, in which Maersk-owned APM Terminals has invested great sums, is down 81 percent and has lost around USD 776 million of its market value in 2014. The decline accelerated significantly in the 4th quarter.
BY OLE ANDERSEN

Maersk's major investment in Russian port company Global Ports Investment, which is listed on the London Stock Exchange, has received a veritable beating from investors after the economic sanctions against Russia are starting to have a real effect.

Through its port division APM Terminals, Maersk controls 31 percent of Global Ports Investment, Russia's biggest port operator for containers and oil products, but 2014 was a bloody year for the company as its share dropped by more than 81 percent.

The massive decline means that Global Ports Investment PLC's market share has dropped around USD 776 million.

Escalating share drop

The share in Global Ports Investment, which currently has a market value of USD 535 million, is now trading at USD 2.80, compared to approximately USD 14.99 one year ago.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

The massive decline of the Russian port company picked up speed in the latter part of the year, dropping 61 percent in the 4th quarter 2014.

APM Terminals invested around USD 900 million in Global Ports in the late summer 2012, for a 37 percent stake in the Russian company at the time. Even though some observers said the price was very high, APM Terminals has continuously maintained that the transaction represented a strong and long- term investment in Russia as one of the biggest growth economies going forward, especially in the wake of the acquisition.

"It's a long term investment, so to us it's an opportunity to secure a platform in that part of the world, to develop the business and make new investments. We believe Russia in itself holds an enormous growth potential, and it won't be many years before Russia is the biggest consumer market in Europe," APM Terminals CEO Kim Fejfer told ShippingWatch in 2013.

Fear of Russian collapse

The economic sanctions from the US and the EU following the conflict in Ukraine are not the only factors making the most pessimistic economists and politicians fear an actual collapse of the Russian economy and difficult times ahead for the most exposed companies.

Photo: Mikhail Klimentyev, AP - polfoto
Photo: Mikhail Klimentyev, AP - polfoto

Global Ports lost revenue as well as profits in the first half of 2014. The 2nd quarter interim report showed a five percent decline in revenue, USD 14 million, down to USD 287 million in the first six months of the year. The operating profit also decreased, from USD 144 million to USD 126 million, in a period where Global Ports' two major container terminals in St Petersburg and Ust-Luga were hit by lower growth in Russia and the escalating conflict in Ukraine.

Last summer this negative development made analysts Morgan Stanley perform a significant downgrade of Global Ports investment, pointing to negative growth for the full year 2014.

Tough political confrontation

Last month, numerous observers in the West began discussing whether the sanctions against Russia should be eased because the country's economy has entered an acute crisis. The downturn is very much caused by the declining price of oil, traditionally a huge source of income for the country. But the western sanctions are said to play a big part in the crisis as well.

Do you want to stay up to date on the latest developments in International shipping? Subscribe to our newsletter – the first 40 days are free

The value of Russia's currency, the ruble, has plummeted and the Russian national bank has tried to soften this decline by increasing interests significantly. This means that many Russian companies are facing serious financial troubles as it has now become extremely difficult to borrow money.

The European heads of state and governments decided shortly before Christmas to maintain this position in a long-term confrontation if president Putin continues the current Russian stance in terms of Ukraine.

However, not all the EU countries seem to back a hard line against Russia, and Germany's Minister of Foreign Affairs, Frank-Walter Steinmeier, among others, has warned that it could be dangerous and destabilizing for Russia if the EU and the West add further pressure on Russia through the sanctions.

The terminals

Global Ports' terminals are located by the Baltic Sea and in the far eastern part of Russia. In addition to five container terminals in Russia, the company also operates two terminals in Finland, Multi-Link Terminals Helsinki and Multi-Link Terminals Kotka.

These are the Global Ports numbers that worry Maersk

Morgan Stanley: Ukraine crisis hits Global Ports

Drewry: Crimea is a risk to Global Ports

Global Ports is losing revenue 

Related articles:

  • These are the Global Ports numbers that worry Maersk

    For subscribers

  • Morgan Stanley: Ukraine crisis hits Global Ports

  • Drewry: Crimea is a risk to Global Ports

Sign up for our newsletter

Stay ahead of development by receiving our newsletter on the latest sector knowledge.

!
Newsletter terms

Front page now

Maersk CEO Vincent Clerc (left) and MSC CEO Søren Toft are following very different strategic directions. | Foto: Jacob Gronholt-pedersen/reuters/ritzau Scanpix og Jason Decrow/ap/ritzau Scanpix
Container

Maersk could be heading for a price war with MSC

After a profit of historic proportions in 2022, Maersk is facing a new reality this year, entailing a potential price war unleashed by the carrier’s partner in the disbanded 2M alliance, MSC, predicts Drewry.
  • Opinion: Maersk and MSC heading for direct confrontation over customers
  • Drewry director eyes one central weakness in Maersk's strategy

For subscribers

Krisen på fragtmarkedet styrker DSV's position i forhold til rederierne: ”I og med at vi er en af de store aftagere af søfragt, har vi også et samarbejde med rederierne, som er strategisk og forankret i direktionen,” siger DSV's topchef, Jens Bjørn Andersen. | Foto: Lars Krabbe/Foto: Lars Krabbe/Ritzau Scanpix
Logistics

DSV to support box carriers that provided help during Covid chaos

For subscribers

Foto: Rebecca Naden
Tanker

Countdown to clash over Euronav's board composition has begun

For subscribers

Maersk is heading for its second record profit, setting a new benchmark in Danish business history. | Foto: Jonas Walzberg/AP/Ritzau Scanpix
Container

Maersk on track to achieve record profit for second consecutive year

For subscribers

Foto: Sund & Bælt
Offshore

Danish authorities suspending 23GW of offshore wind projects

For subscribers

Foto: Casper Dalhoff / Ritzau Scanpix
Container

Maersk redirects traffic following earthquake

For subscribers

Further reading

Lars Jensen is a shipping analyst and founder of consultancy Vespucci Maritime. In the future, he will write two opinion pieces for ShippingWatch a month. | Foto: Magnus Møller
Container

Opinion: Maersk and MSC heading for direct confrontation over customers

Ahead of the 2M alliance’s final termination in 2025, Maersk and MSC will probably try to steal customers from each other, writes analyst Lars Jensen.

For subscribers

Foto: Mærsk Mc-kinney Møller Center for Zero Carbon Shipping
Regulation

Mærsk Center for Zero Carbon hires new executive from port company

Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping recruits new executive profile from major port company.

For subscribers

Foto: Joachim Ladefoged
Ports

European ports launch offshore wind collaboration

Last year marked the beginning of a new European collaboration, which has now prompted six wind ports to sign a deal on realizing offshore wind ambitions.

For subscribers

Jobs

  • Chartering Manager for Lauritzen Bulkers A/S

  • Copenhagen Shipping Company is hiring a skilled cargo broker

  • Senior Financial Controller

  • Fleet Manager

  • Vessel Manager Marine and QA

  • Ambitious employee for Shipping office wanted

  • Head of P2X Marketing and Sales (m/f/d)

  • Foundation Package Manager - Offshore wind industry

  • Commercial Contract Manager for the Offshore Wind Industry

See all jobs

Latest news

  • DSV to support box carriers that provided help during Covid chaos – 7 Feb
  • More tankers embark on illicit sailings following embargo on Russian oil – 7 Feb
  • Monjasa to provide green ammonia through new collaboration – 7 Feb
  • Countdown to clash over Euronav's board composition has begun – 7 Feb
  • New major port project underway in the Baltic Sea region – 7 Feb
  • Bank DNB sees box market reach record lows in coming years – 7 Feb
  • Maersk on track to achieve record profit for second consecutive year – 7 Feb
  • Maersk could be heading for a price war with MSC – 7 Feb
  • Oil prices extend gains following earthquake and Chinese demand rebound – 7 Feb
  • Maersk redirects traffic following earthquake – 7 Feb
See all

Jobs

  • Chartering Manager for Lauritzen Bulkers A/S

  • Copenhagen Shipping Company is hiring a skilled cargo broker

  • Senior Financial Controller

  • Fleet Manager

  • Vessel Manager Marine and QA

  • Ambitious employee for Shipping office wanted

  • Head of P2X Marketing and Sales (m/f/d)

  • Foundation Package Manager - Offshore wind industry

  • Commercial Contract Manager for the Offshore Wind Industry

See all jobs

Colophon

ShippingWatch
Search

Sections

  • Carriers
  • Logistics
  • Regulation
  • Suppliers
  • Offshore
  • Ports
  • Sitemap
  • RSS feeds

Editor

Tomas Kristiansen

tk@shippingwatch.dk

Tel.: +45 3330 8360

  • About ShippingWatch

Editor-in-chief

Anders Heering

Publisher

JP/Politiken Media Group Ltd

Advertising

annoncering@infowatch.dk

Tel.: +45 7077 7445

Advertising

Job Advertising

job@infowatch.dk

Tel.: +45 7077 7445

Jobs

Subscription

Try ShippingWatch or get an offer for a subscription meeting the exact needs of you or your company.

shippingwatch@infowatch.dk

Tel.: +45 7077 7445

Learn more about subscriptions here

Address

ShippingWatch

Rådhuspladsen 37

1785 Copenhagen K, Denmark

Tel.: +45 3330 8360

Guidelines

  • Privacy Policy

Copyright © ShippingWatch — All rights reserved

Microsoft is in the process of discontinuing Internet Explorer – and so are we.
For a better experience, we recommend using one of the following browsers.

Kind regards,
ShippingWatch

Google ChromeMozilla FirefoxMicrosoft Edge