A.P. Moller - Maersk delivered solid financial results for 2023 in line with our financial guidance for the year. While volumes were up across most products and strong cost control helped improve results, rates continued to erode, particularly in Ocean. Revenue for 2023 was USD 51.1bn with an EBIT margin of 7.7% impacted by declining freight rates.
Ocean saw strong schedule reliability and the continued efforts to bring down costs helped ease headwinds from the rapid increase in supply. Financial results were still strong due to robust cost containment but eroded during the year, as continued challenging market conditions resulted in substantially lower freight rates.
Logistics and Services continued to win new business but destocking at the beginning of the year followed by lower rates led to a decrease in revenue. Profitability declined compared with 2022 and an increased emphasis on cost management helped protect margins and reset the cost basis.
Terminals continued the steady performance and secured another very strong year. Despite a decline in storage revenue given the market normalisation, diligent execution on operational excellence, cost control, price increases and utilisation led to Return on Invested Capital (ROIC) of 10.5%, ahead of mid-term targets.
Financial guidance for 2024
Guidance is based on the expectation that global container volume growth in 2024 will be in the range of 2.5% to 4.5% and that Maersk will grow in line with the market. It is further expected that the significant oversupply challenges in the Ocean industry will materialise fully over the course of 2024. High uncertainty remains around the duration and degree of the Red Sea disruption with the duration from one quarter to full year reflected in the guidance range. Front-loading is expected towards the start of 2024.
Svitzer demerger
The Board of Directors of Maersk has decided to initiate a demerger of Maersk’s towage business which will be tax exempt for Danish tax purposes. The activities in Svitzer A/S (Svitzer) and its subsidiaries will be contributed to a new company with the legal name Svitzer Group A/S (Svitzer Group) which shares will be distributed pro-rata to Maersk shareholders and are expected to be admitted for trading and official listing on Nasdaq Copenhagen A/S (Nasdaq Copenhagen).
Having evaluated the different options for Svitzer, Maersk has concluded that Svitzer as a stand-alone listed entity is the best option for the company and for long-term value creation for Maersk shareholders, offering them the possibility to participate in the future growth of a global leader within towage with attractive development prospects. Subject to approval by the Maersk shareholders at an EGM in late April, the anticipated first day of trading and official listing for the shares of Svitzer Group on Nasdaq Copenhagen is 30 April 2024.
For more information:
Morten Buttler
A.P. Moller - Maersk
Tel.: +45 28148202
Email: morten.buttler@maersk.com