- A.P. Moller – Maersk (Maersk) reported first-quarter results in line with expectations, showing a robust recovery in earnings compared to the previous quarter.
- The performance was attributed to strong demand and ongoing disruptions in the Red Sea region.
- As these conditions are anticipated to persist into the second half of the year, Maersk has adjusted its guidance range, expecting underlying EBIT to be at USD -2.0 to 0.0bn.
Maersk’s first-quarter results were buoyed by a favorable performance in Terminals, coupled with higher demand and prolonged disruptions in the Red Sea. Despite challenges, the company experienced a notable recovery compared to the previous quarter, reflecting resilience in its operations amidst volatile market conditions.
Market Impact of Red Sea Crisis
The ongoing crisis in the Red Sea significantly impacted Ocean results, leading to increased market rates and costs due to supply chain disruptions. However, strong volumes, high capacity utilization, and disciplined cost management contributed to improved outcomes compared to the preceding quarter.
Challenges in Logistics & Services
While Logistics & Services witnessed substantial volume growth, margin performance remained unsatisfactory due to low utilization in certain warehouses and short-term hurdles in implementing new customer contracts, particularly in the ground freight business in North America.
Positive Performance in Terminals
Terminals registered a strong start to the year, driven by robust volume growth and effective cost management strategies. High productivity levels further bolstered margins, reflecting the company’s focus on operational efficiency.
Portfolio Streamlining and Spin-Off
Maersk continued its portfolio optimization efforts by completing the spin-off of Svitzer, aligning its business towards end-to-end logistics solutions. The demerger, approved by an Extraordinary General Meeting, underscores Maersk’s commitment to refining its business model.
Revised Financial Guidance for 2024
Based on strong market demand and persistent disruptions in the Red Sea region, Maersk has adjusted its financial guidance for 2024. The company raised the lower end of its original guidance range, reflecting a more optimistic outlook for container volume growth and overall performance.
Cash Distribution to Shareholders
During Q1 2024, Maersk distributed a total of USD 1.5bn to shareholders through dividends and share buy-backs, highlighting its commitment to delivering value to investors amidst evolving market dynamics.
About Maersk
A.P. Moller – Maersk is a leading integrated logistics company operating globally, with a focus on simplifying and connecting supply chains for its customers. With a workforce of around 100,000 employees and operations spanning more than 130 countries, Maersk aims to achieve net-zero emissions by 2040 through technological advancements and sustainable practices.
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Source: Maersk
