Logistics business more than doubles earnings in 2020
2020 has been another year of solid progress for A.P. Moller - Maersk, both in terms of financial performance and in transforming the company.
Despite low volumes during most of 2020, profitability grew throughout the first nine months and ended the year with record Q4 results in Logistics and Terminals, while Ocean delivered an exceptional quarter driven by the increased volumes and supply chain disruptions.
Søren Skou, CEO of A.P. Moller - Maersk said: “2020 will forever be remembered for the COVID-19 pandemic that negatively impacted our lives, jobs, businesses and the global economy.
"I am proud that we have accelerated our transformation and delivered earnings growth during every quarter of 2020, despite very different market conditions, beginning with negative COVID-19 impact in the first half to a rebound in Q4.
“Our customers want us to help them build more resilient supply chains and buy more end-to-end services. Consequently, our logistics business more than doubled earnings in 2020.
"We are today a profitable, growing logistics company with a broad offering of ocean and air transportation, port services and logistical capabilities, including warehousing, custom services and lead logistics.”
The company grew underlying earnings before interest, tax, depreciation and amortisation (EBITDA) 44% to $8.2 billion and revenue grew to $39.7 billion in 2020 compared to $38.9 billion last year.
While the demand surge in the second half of year created supply chain bottlenecks, including vessel and container shortages, and led to higher rates that contributed approximately $1.5 billion to results.
Ocean further improved its intrinsic performance by focusing on costs, agile capacity management and launching new digital offerings.
Logistics & Services grew to $7 billion, compared to $6.3 billion last year, and EBITDA improved 110% to $454 million, supported by the acquisition of Performance Team as well as improved performance in intermodal, air freight forwarding and warehousing and distribution.
Gateway terminals saw a decrease in revenue of 3.9 pct. to USD 3.2bn in 2020 because of lower volumes due to impact from the pandemic.
Søren Skou concludes: “Financially, we left 2020 with a very strong balance sheet and little debt, which will allow us to continue to invest in our transformation and grow profitably.
"We are well equipped to deal with the ongoing market volatility and also to benefit from a world that hopefully starts to re-open.”
Maersk expects the current, exceptional situation to continue into 2021 with Q1 to be stronger than Q4, followed by a normalisation thereafter, and announce a guidance for the full-year 2021 of an underlying EBITDA in the range of $8.5-10.5 billon, compared to $8.3 billion in 2020.
Ocean is expected to grow in line with the global container demand at an expected 3-5% in 2021, with the highest growth seen in the first half of the year.