AP Moller-Maersk, parent company of Maersk Line, now the second largest ocean container carrier by capacity after years at the top (now supplemented by Mediterranean Shipping Company), reported its most profitable quarter ever in Q1, with strong rates in its container shipping more than offsetting a drop in container volumes.
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Maersk said increased its profit forecast for this year to $24 billion, up from its February estimate of $19 billion.
Skou, nevertheless, said that “We are assuming a slowdown in the second half, a normalization.” |
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In its Q1 earnings report released in early May, Moller-Maersk saw $19.3 in revenue, a 55% increase. EBITDA more than doubled to a record $9.1 billion and free cash flow increased to a huge $6 billion.
The container shipping segment also saw Q1 revenue rise a robust 64% to $15.6 billion, as strong rates more than offset a 7% drop in container volumes.
That drop in volume is more than was seen in the overall global market, which Maersk said fell by 1.2%, compared to an increase of 8% in 2021.
“The increased earnings are driven by freight rates and by contracts being signed at higher levels,” said CEO Søren Skou.
Other segments also had stellar results. Revenue in Maersk’s “logistics” segment (managing end-to-end shipping and distribution services) grew to $2.9 billion, a 41% increase compared to same quarter last year. In “terminals” (Maersk owns container terminal provider APM Terminals) revenue increased to $1.1 billion in Q1, versus $915 million in 2021.
“In logistics, we enjoyed strong demand for products and solutions across our portfolio leading to the 5th quarter in a row with organic growth of more than 30%, while terminals presented its best quarter ever,” Skou added.
Maersk said it expects revenue for the full year to continue to be strong as the increase in freight rates on long-term contracts is expected to add approximately $10 billion to its top line in 2022 compared to 2021.
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Maersk increased its profit forecast for this year to $24 billion, up sharply from its February estimate of $19 billion.
Skou, nevertheless, said that “We are assuming a slowdown in the second half, a normalization.”
The company said profits will also be impacted by soaring fuel costs.
Skou also said that – for now - he didn’t “see much potential to speed up the greening” of Maersk’s container ships despite significant efforts in that direction, but the company is stepping up purchases of electric trucks for its logistics operations.
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