AP Moller-Maersk reported another record profit in the third quarter — its 16th consecutive quarter with year-on-year earnings growth.
The Copenhagen-based liner giant also maintained its own profit and capex forecasts for the year unchanged at underlying Ebitda of about $37bn, underlying Ebit of around $31bn and free cash flow above $24bn.
Maersk, however, acknowledged that the overall market is slowing amid recession and inflation fears and now projects global container demand to drop between 2% and 4% this year.
Its previous estimate had been at the “lower end of the +1-/1% range”.
“With the war in Ukraine, an energy crisis in Europe, high inflation and a looming global recession there are plenty of dark clouds on the horizon,” the company’s chief executive officer Soren Skou said in an earnings release.
“It is clear that freight rates have peaked and started to normalise during the quarter, driven by both decreasing demand and easing of supply chain congestion,” he added.
Despite the global slowdown, Maersk saw ocean freight rates increase in the third quarter, both year-and-year and quarter-on-quarter.
As a result, the company's net income climbed to $8.9bn in the third quarter from $5.4bn last year and to $24.2bn for the first nine months of 2022.
Overall revenue increased by 37% in the third quarter to $22.8bn while Ebitda gained by 60% over the same period to $10.9bn.
However, ocean freight rates will come down, the company said, in line with previous statements.
That slowdown, however, will not be an obstacle to the company’s transformation drive.
Softer market
“While we expect a slow-down of the global economy to lead to a softer market in ocean, we will continue to pursue the growth opportunities within our logistics business,” Skou said.
Logistics revenue rose by 60% year-on-year to exceed the $4bn mark for the first time in the company’s history. “We expect to continue to outgrow the market in logistics based on new customer wins,” Skou added.
To that effect, Maersk already completed the acquisition of LF Logistics and announced in August an intended takeover of Denmark’s Martin Bencher Group.
At the same time, the company said it “significantly expanded its “warehouse, distribution centre and cold storage footprint” with 21 incremental facilities across key markets such as Latin America, Europe and India.
