Maersk Drops as Investor Day Gets Bad Reviews: Copenhagen Mover

A.P. Moeller-Maersk A/S, Denmark’s biggest company, fell to the lowest price in three weeks in Copenhagen trading after its capital markets day sparked concern over future profitability at its oil division.

Maersk fell as much as 1.9 percent, extending losses from yesterday when the stock dropped 2.1 percent. The shares retreated 1.7 percent to 40,960 kroner at 10:22 a.m. in the Danish capital, heading for the lowest closing price since Sept. 14.

Maersk yesterday hosted the first capital markets day in its 108-year history, presenting investment and growth plans for its terminal unit and the oil division. The Copenhagen-based company said it had proved and probable oil reserves of 1.38 billion barrels at the end of 2011, that capital expenditure will increase to as much as $5 billion a year and that its return on invested capital will decline during the expansion phase.

“The news didn’t excite us,” Jacob Pedersen, an analyst with Sydbank A/S in Aabenraa, Denmark, said in a note today. “Oil reserves were lower than expected and the return on invested capital suggest that in the coming years, earnings will be lower than what investors have become used to.”

The investor meeting “made us somewhat more uncertain on long-term production targets, capex and the ROIC within the oil division,” Danske Markets said today in a note to clients. “The company gave less than expected information on execution of the oil projects.”

DNB Markets today cut its price estimate on the Maersk share to 53,000 kroner from 54,000 kroner citing a lower production forecast and higher spending estimate for the oil division.

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