Container shipping giant AP Moller-Maersk has reported a sharp fall in second-quarter profit, compared with the strong performance seen at the same stage in 2023.
The Danish company said profit was $623m in the second quarter of 2024, against the $1.3bn booked at the same stage 12 months ago.
The result, which reflected the lower Ebit, was adjusted for net gains of $208m, primarily driven by vessel and container sales in its Ocean division.
As pre-announced on 1 August, Ebitda in the second quarter was $2.1bn on revenues of $12.8bn, against $13bn recorded in the same period of 2023. Ebit was $756m for the quarter.
Vincent Clerc, chief executive of Maersk, said: “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, which leads to continued pressure on global supply chains.
“These conditions are now expected to continue for the remainder of the year.”
Volumes up
Revenue decreased by $217m to $12.8bn, down from $13bn in the same quarter last year.
That stemmed from a decrease in its Ocean division of $333m and by $129m as a result of the Svitzer demerger.
Revenue in its Logistics & Services and Terminals divisions increased by $246m and $139m, respectively.
Volumes picked up in the second quarter, reporting growth across all segments. Ebit margin reached 7.5%, compared to 1.4% in the first quarter.
“We have invested in additional equipment in all our businesses to adapt to the situation and continue supporting our customers through the disruptions,” said Clerc.
“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 utilisation, and further execute on our fleet renewal programme.”
Results were driven by increased profitability in its Ocean division, which saw strong volume growth and higher freight rates, primarily in Asia exports, the company said.
The situation in the Red Sea and rerouting south of the 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,” Maersk said.
Logistics & Services grew by 7%, compared to the year prior, and increased volumes across all product families more than offset low rates.
Terminals continued to deliver volume growth, particularly in North America.
Guidance
The positive result comes just days after Maersk increased its profit guidance for the year.
The Copenhagen company now expects underlying Ebitda should come in at between $9bn and $11bn this year, compared with earlier guidance of $7bn to $9bn.
Ebit is projected to come in at between $3bn and $5bn, instead of between $1bn and $3bn.
The liner giant expects its free cash flow to reach at least $2bn this year, up from a previous forecast of at least $1bn.
Houthi warfare on ships crossing the Bab el-Mandeb strait in response to the Israel-Hamas conflict in Gaza has caused vessels to avoid the waterway and sail around southern Africa instead, increasing tonne-miles, shortening tonnage supply and boosting the revenue of shipping companies.
These estimates are underpinned by Maersk’s expectations of global container market volume growth between 4% and 6% for the full year.
This is at the upper range of its previous forecast of between 2.5% and 4.5%.
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