Transport and Logistics ME
www.transportandlogisticsme.com
Maersk Earnings Before Tax Increase 17% in Second Quarter
Sea Freight

Maersk Earnings Before Tax Increase 17% in Second Quarter

Profits increase to $134 million

TLME News Service

AP Moller-Maersk has delivered a 17% increase in earnings before interest, tax, depreciation and amortization (EBITDA) to $1.4 billion in Q2 2019 compared to the same quarter last year.

Revenue grew slightly to $9.6 billion, which is on par with last year, and the underlying profit increased to $134 million from $15 million in Q2 2018.

Søren Skou, CEO of AP Moller-Maersk said: “Q2 was a quarter of solid progress. EBITDA was up 17% and cash flow improved 86% year on year, driven by continued recovery in Ocean.

On the back of the increases in volume and freight rates, Ocean EBITDA in Q2 increased 25% to $1.1 billion. The Ocean business continued to recover with enhanced unit cost, utilization and reliability and revenue grew 2.9% to $7.2 billion compared to Q2 2018.

Revenue in Terminals & Towage grew 13% to $957 million compared to Q2 last year. In gateway terminals, volume in Q2 grew by 8.5% compared to last year, leading to higher utilization. EBITDA increased by 11%, partly offset by one-off items.

In Logistics & Services EBITDA grew to $61 million in Q2 compared to $52 million in the same quarter last year. Revenue was at $1.5 billion, positively impacted by increased revenue in supply chain management, but offset by declining revenue from sea and air freight forwarding.

Saudi Ports Authority Signs New License Deal with Maersk

In Q2, A.P. Moller - Maersk distributed $615 million in cash to shareholders through an ordinary dividend of $469 million and $146 million related to the first phase of the share buy-back programme announced in May 2019 of DKK 10 billion (around $1.5 billion) over a period of up to 15 months.

During the first half of 2019, AP Moller-Maersk formed one sales organisation. Its focus is now on giving customers an integrated experience and offering them even more products, thus improving the financial results across the business and accelerating the transformation.

Skou elaborates: “The transformation progressed further with an improved cash return on invested capital of 6.9% and synergies of $1 billion realised earlier than expected. Growth in revenue and gross profit in Logistics & Services still need to improve as we continue to build capabilities within logistics and services.”

The latest example of a digital innovation to improve customer experience is Maersk Spot, which simplifies the buying process and offers increased visibility and reliability by enabling customers to search and get competitive rates online, while ensuring cargo gets on board the selected vessel.

TradeLens, the blockchain platform developed together with IBM, also progressed with several new commitments from carriers and port authorities during the quarter.

While EBITDA for the first half year improved by $500 million to $2.6 billion, AP Moller - Maersk reiterates it’s full-year guidance for 2019 of an EBITDA of around $5.0 billion including effects from IFRS 16.

Skou concludes: “We reaffirm our guidance for 2019, while the macro environment continues to be subject to considerable uncertainties.”

Read More: Maersk Reports Solid Uplift in Earnings for Q12019