A.P. Moller – Maersk continued to build momentum in the second quarter reporting volume growth across all segments and improved financial performance with EBIT margin reaching 7.5% compared to 1.4% in the first quarter, reports Maersk.
Guidance Upgrade Amid Red Sea Crisis
Results were driven by increased profitability in Ocean, solid growth in Logistics & Services, and excellent performance in Terminals.
Due to the prolonged crisis in the Red Sea and continued robust market demand, Maersk upgraded its guidance for 2024 on August 1st.
“Our results this quarter confirm that performance in all our businesses is trending in the right direction. Market demand has been strong, and as we have all seen, the situation in the Red Sea remains entrenched, leading to continued pressure on global supply chains. These conditions are now expected to continue for the remainder of the year. We have invested in additional equipment in all our businesses to adapt to the situation and continue supporting our customers through the disruptions. As we look ahead, our focus remains on leveraging organic growth while exploring opportunities for value-accretive acquisitions, particularly in Logistics. We will maintain tight cost control and high asset utilization, and further execute our fleet renewal program,” according to Vincent Clerc CEO of Maersk.
Segment Highlights
Ocean saw strong volume growth and higher freight rates, primarily in Asia exports, reflecting the increased supply chain pressure, while the situation in the Red Sea and rerouting south of Cape of Good Hope continued to lead to higher operating costs. Profitability returned to positive territory, and while below the same quarter last year, performance was significantly better compared to Q1 2024 and Q4 2023.
Logistics & Services grew by 7% compared to the year prior and increased volumes across all product families more than offset low rates. Profitability improved both sequentially and year on year, positively impacted by increased asset utilization good cost control, and progress on initiatives to address customer implementation challenges in the ground freight business in North America.
Terminals continued to deliver volume growth, particularly in North America Revenue per move increased significantly due to higher tariffs and higher storage while cost per move increased slightly. Effective cost management and robust revenue growth supported profitability, leading to one of the highest EBITDA levels ever.
Upgraded Financial Guidance
Due to continued supply chain disruptions caused by the ongoing situation in the Red Sea/Gulf of Aden and robust container market demand, Maersk has raised its financial guidance:
● Global container market growth is now expected to be between 4-6%, with Maersk growing in line with the market. This is an increase from the previous expectations of towards the upper end of 2.5-4.5%.
● CAPEX for 2024-2025 is now expected to be between USD 10.0-11.0bn, up from the previous estimate of USD 9.0-10.0bn, due to continuous fleet renewal.
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Source: Maersk
