Danish shipping giant A.P. Moller – Maersk saw a substantial decline in profitability primarily due to lower freight rates and volumes, as demand softened. Maersk´s first quarter 2023 financial results reflect the normalisation of global demand and supply, as said by the company.
Substantial declines in freight rates have affected Maersk which sees its Q1 2023 profitability shrink. Continued destocking and easing of congestions implied lower volumes across all segments.
However the company maintains its expectations for the year. While it is difficult to predict the exact timing, Maersk expects volumes to gradually pick up in the second half of the year.
Maersk delivered a solid financial performance in line with expectations in the first quarter of 2023. The full-year guidance remains unchanged, with Q1 expected to be the strongest quarter of the year.
The very different market dynamic that began down the final stretch of 2022 has continued in the first quarter of this year. Profitability for the quarter in the three main businesses was significantly lower compared to the same quarter last year, while revenue declined by 26% to USD 14.2bn from USD 19.3bn.
Ebitda decreased to USD 4.0bn from USD 9.1bn, and Ebit to USD 2.3bn from USD 7.3bn. Ocean revenue decreased by USD 5.7bn to USD 9.9bn. In Logistics & Services, revenue grew 21% to USD 3.5bn driven by the consolidation of acquisitions. Revenue in Terminals decreased to USD 876m from USD 1.1bn, but strong cost control contributed to continued solid financial performance in Terminals.
“We delivered a solid financial performance in a challenging market with lower demand caused by a continued destocking. Visibility remains low for the remainder of the year and moving through this market normalisation, we remain focused on proactively managing costs. As we adjust to a radically changed business environment, we continue to support our customers in addressing their supply chain challenges. We are pleased to note that customers continue to value the integrated logistics solutions and close partnership we provide,” said the CEO of Maersk Vincent Clerc.
A.P. Moller – Maersk’s first quarter 2023 financial results reflect the normalisation of global demand and supply, characterised by the inventory corrections seen in Western economies over the past two quarters.
This resulted in significantly lower profitability of the three main businesses compared to the first quarter last year, particularly in Ocean, where the profit was lower due to lower volumes and freight rates.