Maersk reports strong results across all business segments

Monday, 11 November 2024 01:58 - - {{hitsCtrl.values.hits}}

A.P. Moller – Maersk (Maersk) said last week it continued strong business performance in the third quarter.

Maersk reported growth across its businesses and financial results significantly above those of the previous year, primarily driven by Ocean, while both Logistics and Services, and Terminals also contributed through improved earnings. On the back of the strong quarter combined with robust container market demand and the continuation of the Red Sea situation, Maersk upgraded its guidance for 2024 on 21 October, now expecting full-year underlying EBIT of $ 5.2 to 5.7 billion (previously $ 3.0 to 5.0).

Maersk CEO Vincent Clerc said, “This quarter, we once again supported our customers through times of high volatility and low visibility. We reaffirmed our commitment to profitable growth and operational progress, driving results across all business areas through continued rigorous focus on cost discipline, productivity gains, and efficient asset utilisation. In Logistics and Services, our focused effort led to steady margin improvements and growth through new customer wins. In Terminals, we drove additional improvements, building on already high performance. Our Ocean team responded to the recurring network disruptions with high agility by leveraging our hub terminals and investing in capacity and equipment to mitigate the supply chain impact on our customers while optimising unit costs.”

Ocean’s profitability improvement was driven by higher freight rates as well as positive volume growth, culminating in a 41% increase in revenue. The network re-routing south of the Cape of Good Hope remained a significant driver of our cost base, impacting bunker consumption and overall operating costs. These cost pressures were largely offset by efficient operational execution, resulting in an EBIT increase of $ 2.9 billion and a margin of 25.5%.

Logistics and Services delivered a strong third quarter with revenue growth of 11% year-on-year and 7.2% sequentially due to increased volumes across most products. Profitability continued its recovery, landing at an EBIT of $ 200 million, an increase of $ 64 million year-on-year, primarily from profitable growth in Lead Logistics and Air, resulting in an EBIT margin of 5.1%.

Terminals continued to deliver strong top-line growth, particularly in North America. Revenue per move reached all-time highs during the quarter driven by higher volumes, improved tariffs, and product mix. Accordingly, Terminals achieved its best EBITDA since Q1 2022 of $ 424 million and finishing the quarter with a ROIC (LTM) of 13.0%.

As announced on 21 October, on the back of strong Q3 results combined with strong container market demand and the continuation of the Red Sea/Gulf of Aden situation, Maersk raised its financial guidance for the full-year 2024 as seen in the table below. Maersk now expects global container market growth for the full year to be around 6% (previously 4-6%). CAPEX guidance remains unchanged.