A.P. Moller – Maersk’s results in the third quarter of the year showed higher profits in all its three main activities: Ocean, Logistics & Services and Terminals, compared to the same period last year.
The Danish company’s revenues increased by 37% and both EBITDA and EBIT increased by approximately 60% compared to Q3 2021, while global container volumes are estimated to have declined by 3% in the same period.
Maersk’s revenue reached US$22.8 billion, EBITDA increased to US$10.9 billion and EBIT climbed to US$9.5 billion. Additionally, the carrier achieved a profit of US$8.9 billion for the third quarter and US$24.2 billion for the first nine months of the year.
The CEO of Maersk, Søren Skou, said, ”Our third quarter result was another record and the 16th quarter in a row with year-on-year earnings growth. Ocean freight rates, which have driven the exceptional results we have delivered in 2022, were again up both year-on-year and compared to the second quarter. However, it is clear that freight rates have peaked and started to normalise during the quarter, driven by both decreasing demand and easing of supply chain congestion.”
In the Ocean sector, revenue increased over the quarter to US$18 billion and EBIT rose to US$8.7 billion mainly driven by significantly higher freight rates on contract and shipment on routes from Asia to Europe and to North America, partly offset by a decrease in volumes and by higher costs related to bunker, container handling and network.
“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon. This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand,” Skou said.
“While we expect a slow-down of the global economy to lead to a softer market in Ocean, we will continue to pursue the growth opportunities within our Logistics business. As a trusted partner, we are ready to support our customers in rethinking their supply chain needs through what is likely to be a period of a more volatile business environment,” he added.
In the Logistics & Services sector, Maersk continued to invest in its portfolio and capabilities. The acquisition of LF Logistics was completed, the intended acquisition of Martin Bencher Group was announced, and the warehouse, distribution center and cold storage footprint were significantly expanded with 21 incremental facilities across key markets like Latin America, Europe and India.
Revenue in this sector grew 60% to US$4.2 billion and EBIT increased to US$258 million mainly due to added revenue from acquisitions and higher volumes, in particular among Maersk’s existing top 200 customers.
Furthermore, in the Terminals sector, revenue grew to US$1.1 billion and EBIT increased to US$357 million, mainly driven by higher volumes and prices as well as the completion of the divestment of the Terminal’s share in Global Ports Investments in Russia.
As a result of slowing economic activity, Maersk expects global container demand to contract between –2 and –4% in 2022.
Moreover, Maersk announced full-year guidance for underlying EBITDA of around US$37 billion, an underlying EBIT of around US$31 billion and a free cash flow above US$24 billion.
Given the unfolding economic slowdown, which is also expected to continue into the coming year, APMM has lowered its outlook for the growth of 2022 global container demand to between –2/-4% decline from previously the lower end of the +1-/1% range.
Capex guidance for 2022-2023 remains unchanged at US$9-10 billion, according to the latest Maersk’s report.
“As anticipated all year, earnings in Ocean will come down in the coming periods. Our overall transformation momentum remained very strong as we continue to grow our Logistics business rapidly. For the first time, revenue in Logistics exceeded US$4 billion in one quarter, and we expect to continue to outgrow the market in Logistics based on new customer wins,” Skou said.
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