A.P. Moller – Maersk’s (Maersk) financial results for third quarter of 2023 were in line with expectations in a difficult market environment with rates well off their 2022 peak and tested by the increase of capacity in Ocean. Revenue was USD 12.1bn compared to USD 22.8bn in Q3 2022 with an EBIT margin at 4.4% impacted by lower freight rates and lower volumes. Maersk maintains its guidance ranges but now expects to be towards the lower end of the ranges.
Ocean reported a 9% increase in volumes since the previous quarter and a strong cost focus supported an 11% decrease in unit cost at fixed bunker compared to Q3 2022. However, EBIT was negative at USD 27m, down from USD 8.7bn in Q3 2022, driven by significant pressure on rates, in particular on Asia to Europe, North America and Latin America trades.
Revenue in Logistics & Services was USD 3.5bn compared to USD 4.2bn in Q3 2022. The segment was impacted negatively by lower prices, especially in the air and haulage market, while volumes were broadly back in line with last year’s level. Increased cost management helped stabilise margins sequentially.
Terminals reported revenue at USD 1.0bn compared with USD 1.1.bn in Q3 2022 driven by less demand for storage amid eased global congestion and a 4.1% decline in volume. Results were strong as a combination of price adjustments and cost measures. Return on invested capital (ROIC) increased to 10.3%, exceeding the expectation of above 9% towards 2025.
Financial guidance for 2023
Maersk now sees global container volume growth in the range of -2% to -0.5% compared to -4% to -1% previously. Ocean expects to grow in line with the market.
Maersk maintains its ranges for the full year 2023 guidance but now expects results towards the lower end of the previously communicated ranges of underlying EBITDA of USD 9.5-11.0bn and underlying EBIT of USD 3.5-5.0bn. Guidance for free cash flow (FCF) of at least USD 3.0bn remains unchanged.
CAPEX is now expected at around USD 8.0bn (previously USD 9.0-10.0bn) for 2022-2023 and USD 8.0-9.0bn (previously USD 10.0-11.0bn) for 2023-2024.
For the announced restructuring cost of USD 350m (previously USD 150m), the majority will be recognised in 2023. The total cost savings are expected to be around USD 600m in 2024 compared to 2023.
For more information:
Mikkel Linnet
A.P. Moller – Maersk
Tel.: +45 248211 96
Email: [email protected]
www.maersk.com
