Danish shipping major Maersk delivered an improvement in its operating results despite a lower global container demand seen in the quarter ended September 30, 2019.
While revenue decreased by 0.9% to USD 10.1 billion in the third quarter of 2019, profitability continued to improve, with EBITDA increasing by 14% to USD 1.7 billion, reflecting an improved EBITDA margin of 16.5%. EBITDA in Ocean improved by 13% to USD 1.3 billion and the margin increased to 17.4%.
Revenue decreased by 0.9% to USD 10.1 billion, as the increase in Logistics & Services and Terminals & Towage with Ocean on par was offset by a decline in Manufacturing & Others, mainly
due to the exit from the dry container business and lower revenue in the reefer segment as well as the divestment of bulk activities originally acquired from Hamburg Süd.
EBITDA increased by 14% to USD 1.7 billion with increases in all segments but primarily driven by increases in Ocean of USD 142 million due to strong operational efficiency and USD 59 million in Terminals & Towage, mainly driven by volume growth and SG&A savings.
EBIT increased to USD 737 million, positively impacted by improved EBITDA and reversal of impairment in Maersk Container Industry of USD 43 million, while the third quarter of 2018 was negatively impacted by an impairment in Maersk Supply Service of USD 345 million and an impairment in the RoRo business of USD 100 million.
“While the global container demand, as expected, was lower in the third quarter due to weaker growth in the global economy, A.P. Moller – Maersk continued to improve the operating results. We delivered strong free cash flow and a return on invested capital of 6.4% as a result of strong operational performance in Ocean, higher margins in Terminals and solid earnings progress in Logistics & Services,” Søren Skou, CEO of A.P. Møller–Mærsk A/S, said.
“The strong performance for the quarter combined with our expectations for the rest of the year, led to the recent upgrade of our earnings expectations for 2019. We will continue our focus on profitability and free cash flow in the fourth quarter and into 2020.
“I am pleased with the progress on the transformation of A.P. Moller – Maersk. We are making progress across multiple fronts including our digital transformation and growth in our land-based logistics products and terminals business.”