Maersk faces growing challenges as it grapples with underperformance and a series of setbacks, according to a report by Linerlytica. The Danish ocean carrier attributed its record EBIT losses in Q4 2023 to overcapacity, reporting losses of $920 million for its Ocean business. Linerlytica highlighted that Maersk’s EBIT margins dropped to -12.8%, over 5% lower than its liner peers. The report emphasized a continuous trend of underperformance since 2020, questioning how long investors can tolerate such results.
Investor Patience Tested
Linerlytica’s report brings attention to the widening gap in EBIT margins between Maersk and its closest rivals, reaching as much as 20%. With Maersk anticipating EBIT losses potentially ballooning to -$5 billion in 2024, investor patience may wear thin. The report raises concerns about the sustainability of Maersk’s underperformance and its impact on investor confidence.
Logistics Pursuits Amidst Challenges
Despite challenges, Maersk continues its pursuit of logistics acquisitions. Confirming a bid for Schenker, Maersk maintains strategic moves in the logistics sector. However, Linerlytica noted that Maersk’s logistics services delivered EBIT margins of just 1.7% in Q4 2023. The report questions the viability of such endeavors amidst the broader performance challenges.
Market Dynamics and Charter Rates
Linerlytica highlighted Maersk’s efforts to present a pessimistic view of the container shipping market. Despite this, container shipping rates have retained gains post-Chinese New Year, with the SCFI and CCFI indices significantly higher compared to the same period last year. The report noted a positive impact on reversing massive fourth-quarter losses, with charter rates firming up and Maersk being a prominent charterer, contributing to almost one-third of recent market fixtures.
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Source: Container News
