Maersk expects $5bn profit in 2019 

Soren Skou, the CEO of Maersk Line speaks during an interview with Reuters at a hotel in London

Soren Skou. PHOTO CREDIT: REUTERS/Luke MacGregor

A.P. Moller-Maersk is foreseeing higher profits in 2019 after delivering improved results in 2018. For 2019, Maersk expects earnings before interest, taxes, depreciation and amortization (EBITDA) of about USD5 billion including effects from IFRS 16, and around USD 4 billion excluding effects from IFRS 16.

The organic volume growth in Ocean is expected to be in line with the estimated average market growth of 1-3% for 2019.

“Maersk’s guidance for 2019 is subject to considerable uncertainties due to the current risk of further restrictions on global trade and other factors impacting container freight rates, bunker prices and foreign exchange rates,” the company said.

In 2018, A.P. Moller – Maersk reported an increase in revenue of 26% to USD39 billion compared to USD30.9 billion reported a year earlier, with growth in all segments. EBITDA for the year was USD 3.8 billion, increasing from US 3.5 billion seen in 2017, in line with the company’s latest guidance of USD3.6 billion to USD4 billion.

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Net profit including discontinued operations was USD3.2 billion, against a loss of USD1.2 billion reported in the previous year, positively impacted by an accounting gain of USD2.6 billion from the closing of the Maersk Oil transaction in 2018 and an impairment in Maersk Drilling of USD 1.75 billion in 2017.

“In 2018, we made significant progress in implementing our strategy. With the expected demerger and listing of Maersk Drilling in April, the separation of our Energy-related businesses will be almost complete,” A.P. Moller–Maersk CEO, Søren Skou, said. 

The improvement in operating earnings was driven by higher freight rates, efficiencies gained from the integration of continuing operations, and synergies from the acquisition of Hamburg Süd.

However, margins in continuing operations were challenged and EBITDA was lower than initially expected at the beginning of the year, primarily due to an increase in bunker fuel prices not fully recovered by higher freight rates, the company explained.

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Skou said, “Although we had a challenging start to 2018, looking at our financial performance, we increased earnings despite significantly higher bunker fuel prices and lower than expected container volume growth in the second half of 2018. However, profitability needs to improve.”

 

 

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