A.P. Moller – Maersk reported profits of $253 million for the first quarter of 2017 in a report released yesterday. Profits were at the same level as last year, reflecting an increase of $321 million in revenues in Maersk Oil due to higher oil prices and lower operating expenses, offset by decreases in almost all other businesses.

Overcapacity in the drilling industry lead to a decrease of $175 million in Maersk Drilling. Despite increasing freight rates, Maersk Line experienced a decrease of $112m primarily due to higher fuel costs.

“We delivered year-on-year revenue growth for the first time since Q3 2014 in line with our ambitions to become a growth company again,” said Soren Skou, CEO of A.P. Møller – Mærsk. “Revenue increased by five percent or $424 million to $9 billion as a result of revenue growth in Maersk Line and Maersk Oil.”

Maersk Line is on track to deliver an improvement of over $1 billion in revenues for 2017 over 2016, despite a loss of $80m in the first quarter, driven by a $381 million higher fuel bill. “Both spot freight rates and contract rates have increased during the quarter, lately also on the North-South trades,” said Skou. “Maersk Line is focused on restoration of profitability and maintaining market share in the next quarters, as industry fundamentals improve.”

Skou expects Maersk Line’s acquisition of Hamburg Süd to close in fourth quarter. He expects the acquisition to deliver substantial revenue, volume, and market-share growth as well as operational synergies of at least $350 million per year beginning in 2019.

“We are starting to see synergies in Transport & Logistics, for example with Maersk Line increasing volumes to APM Terminals, improved collaboration between Maersk Line and Maersk Container Industry leading to significantly higher volumes and improved results, as well as cost synergies,” said Skou.

The Energy was profitable in first quarter with Maersk Oil delivering strong earnings. “Oil price was up year-on-year, and we saw moderate signs of increasing activity in off-shore markets,” said Skou.