Maersk Reports Strong Growth and Improved Profitability in Third Quarter

A.P. Moller-Maersk (Maersk) posted strong growth in business and financial performance during the third quarter of 2024, with improved profitability across its Ocean, Logistics & Services, and Terminals segments. On October 21, the company updated its guidance for underlying EBIT for the remainder of the year to $5.2–5.7 billion, up from the previous estimate of $3–5 billion. The revision reflects the successful quarter, healthy container market demand, and the ongoing Red Sea crisis.

The Ocean segment's profitability improved in the third quarter with better freight rates and strong volume growth, driving a 41% increase in revenue. Network rerouting around the Cape of Good Hope remained a significant cost factor, increasing fuel consumption and total operating expenses. However, strong operational performance offset these costs entirely, resulting in an EBIT of $2.9 billion and a margin of 25.5%.

The Logistics & Services segment saw year-on-year revenue growth of 11% and sequential growth of 7.2%, driven by higher product volumes. Profitability also improved, reaching EBIT of $200 million with an EBIT margin of 5.1%, up $64 million year-on-year, bolstered by positive developments particularly in Lead Logistics and Air.

The Terminals segment demonstrated significant top-line growth, particularly in North America. During the quarter, revenue per move reached record levels, supported by increased volumes, improved rates, and product mix. Terminals recorded its highest EBITDA since the first quarter of 2022 at $424 million and closed the quarter with a 13% ROIC (LTM).

Reflecting the strong third-quarter results, driven by robust container market demand and the continuation of the Red Sea/Gulf of Aden situation, Maersk expects global container market growth of approximately 6% for the full year, up from its previous guidance of 4–6%.

Key Takeaways:

• Maersk raised its underlying EBIT guidance for 2024 to $5.2–5.7 billion.

• The Ocean segment improved profitability with 41% revenue growth and a 25.5% margin.

• Logistics & Services raised profitability with 11% year-on-year revenue growth and $200 million EBIT.

• Terminals recorded significant growth with $424 million EBITDA and 13% ROIC.

• Global container market growth is expected to reach approximately 6% for the full year.

News Link: https://www.porttechnology.org/news/maersk-reports-41-per-cent-increase-in-ocean-revenue/

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