Maersk's revenue growth does not mean higher profits

Earlier this month Maersk issued a profit warning. The 2018 second quarter figures showed that they had an increase in turnover. Despite this, the upward trend did not translate into higher profits. High bunker costs and a disappointing tariff recovery are to blame.

Over the second quarter, this Danish shipping company realised revenue of $9,5 billion. This is an increase of 24% compared to the same period last year. A large proportion of this increase is thanks to the take over of Hamburg Süd. Without this German shipping company's contribution, Maersk's rise in turnover would only have amounted to 5,7%. There was growth in various departments. Hamburg Süd and Maersk have also reached agreements over, among other things, transport routes.

"With 24% rise in revenue in the second quarter, we are continuing our steady growth", says Søren Skou, CEO of A.P. Møller - Mærsk A/S. "Hamburg Süd's acquisition, of course, contributes positively to this growth in the Ocean division. We are satisfied with the growth in the non-Ocean division." It is expected that the yearly turnover will amount to $40 billion. This is 50% more than in 2016.

EBITDA ended up on $883 million. This result was negatively influenced by high bunker costs and the developments in transport tariffs. There was also uncertainty on the world stage. This forced the shipping company to issue a profit warning about this year's profits. The profit forecast has been adjusted to between $3,5 and $4 billion. Conditions in the first half of the year have been challenging. However, Maersk expects improved profitability in the second half. This is because of lower unit costs and higher tariffs.

See Maerks's quarterly figures here