Maersk reports Q2 with increased earnings momentum
In the second quarter, A.P. Moller – Maersk demonstrated significant progress, with volume growth across all business segments and a notable improvement in financial performance. The company’s EBIT margin rose to 7.5%, up from 1.4% in the first quarter. This positive trend was largely driven by increased profitability in the Ocean segment, solid growth in Logistics & Services, and strong performance in Terminals. Reflecting the ongoing challenges in the Red Sea and a sustained high market demand, Maersk raised its 2024 guidance on August 1st.
The Ocean segment experienced strong volume growth and higher freight rates, particularly in Asia exports, which contributed to the overall performance. Despite the increased operating costs due to the prolonged crisis in the Red Sea and rerouting via the Cape of Good Hope, profitability improved significantly compared to the previous quarters.
Logistics & Services saw a 7% growth in volumes compared to the previous year, with all product families contributing to this increase. Improved asset utilization, effective cost control, and progress in addressing customer challenges in North America’s ground freight business led to better profitability both sequentially and year over year.
Financial guidance for 2024
As announced on August 1st, due to continued supply chain disruptions caused by the ongoing situation in the Red Sea/Gulf of Aden and robust container market demand, Maersk raises its financial guidance as seen in the table below. Maersk now expects global container market growth to be between 4-6% and to grow in line with the market compared to the previous expectations of towards the upper end of 2.5-4.5%.
In addition, Maersk now expects CAPEX to be between USD 10.0-11.0bn for 2024-2025 (previously USD 9.0-10.0bn) due to continuous fleet renewal.
| Guidance | USDbn |
|---|---|
EBITDA Underlying (Previously: 7.0-9.0) | 9.0-11.0 |
EBIT Underlying (Previously: 1.0-3.0) | 3.0-5.0 |
Free cash flow Or higher (Previously: 1.0 or higher) | 2.0 |
CAPEX(Unchanged) 2023-2024 | 8.0-9.0 |
CAPEX(Previously: 9.0-10.0) 2024-2025 | 10.0-11.0 |
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Sensitivity guidance
Financial performance for A.P. Moller – Maersk for 2024 depends on several factors subject to uncertainities related to the given uncertain macroeconomic conditions, bunker fuel prices and freight rates. All else being equal, the sensitivities for 2024 for four key assumptions are listed below:
| Factors | Change | Effect on EBIT (Rest of 2024) |
|---|---|---|
Container freight rate | +/- 100 USD/FFE | +/- USD 0.6bn |
Container freight volume | +/- 100,000 FFE | +/- USD 0.1bn |
Bunker price (net of expected BAF coverage) | +/- 100 USD/tonne | +/- USD 0.2bn |
Foreign exchange rate (net of hedges) | +/- 10% change in USD | +/- USD 0.1bn |
In the Terminals segment, volume growth continued, especially in North America, with significant increases in revenue per move due to higher tariffs and storage fees. While costs per move saw a slight increase, strong revenue growth and effective cost management resulted in one of the highest EBITDA levels ever recorded by the company.
A.P. Moller – Maersk, a global leader in integrated logistics, operates in over 130 countries with a workforce of approximately 100,000 people. The company is committed to achieving net zero emissions by 2040 across its entire business, focusing on new technologies, new vessels, and low-emission fuels.
