Maersk Reports the Second Quarter of 2023 to be 'Ahead of Expectations'
A.P. Moller – Maersk reports a second quarter of 2023 ahead of expectations, while the ongoing market normalisation continued through the quarter leading to lower volumes and lower rates.
Revenue stood at US$13 billion compared to US$21.7 billion in Q2 2022 while profitability was strong at 12.4% although significantly lower compared to the extraordinarily strong Q2 2022.
Reflecting the strong first half performance, Maersk raises its financial outlook and now expects underlying EBITDA of US$9.5 - 11 billion (previously US$8 – 11 billion), underlying EBIT of US$3.5 - 5 billion (previously US$2 - 5 billion) despite a weakened second half market outlook.
Vincent Clerc, CEO of Maersk said: “The Q2 result contributed to a strong first half of the year, where we responded to sharp changes in market conditions prompted by destocking and subdued growth environment following the pandemic fuelled years.
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"Our decisive actions on cost containment together with our contract portfolio cushioned some of the effects of this market normalisation. Cost focus will continue to play a central role in dealing with a subdued market outlook that we expect to continue until end year.
"While we step this agenda further up, we are unwavering in our transformation and continue to invest in and deliver truly integrated logistics solutions to our customers and amplify their supply chain resilience for the uncertain times ahead.”
Ocean revenue decreased to US$8.7 billion from US$17.4 billion driven by a decrease in freight rates and loaded volumes.
While the volume and rate environment stabilized at a lower level during Q2, Ocean continued to be impacted by lower demand, driven by a significant inventory correction in particular in North America and Europe.
A strong cost management allowed to partially offset the top line impact on financial performance in Ocean.
Revenue in Logistics & Services was US$3.4 billion compared to US$3.5 billion.
The segment was also impacted by lower volumes due to the continued destocking and weaker consumer demand, as well as low rates. As in Ocean, market demand is expected to continue to be subdued as long as the inventory correction is ongoing.
Revenue in Terminals decreased to US$950 million from US$1.1 billion and was influenced by the normalisation of storage revenue and lower volumes amid lower consumer demand and less congestion in North America. Strong cost control contributed to a continued solid financial performance.
Financial guidance for 2023
The inventory correction observed since Q4 2022 appears to be prolonged and is now expected to last through year end.
Based on the continued destocking, A.P. Moller – Maersk now sees global container volume growth in the range of -4% to -1% compared to -2.5% to +0.5% previously. Ocean expects to grow in-line with the market.
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