A.P. Moller – Maersk reports solid Q1 results

Ocean revenue decreased by USD 5.7bn to USD 9.9bn. Profitability for the quarter was significantly lower compared to Q1 2022, primarily due to lower freight rates and volumes, as demand softened. However, proactive cost containment measures have been successful, and the Ocean contract negotiation season is proceeding in line with expectations.

In Logistics & Services, revenue grew 21% to USD 3.5bn driven by the consolidation of acquisitions. Organically, Q1 was affected by lower volumes caused by inventory corrections, especially with North American and European retailers, which was partially offset by new commercial wins. Additionally, underlying business performance was impacted by lower rates in Air Freight and weaker demand in eCommerce.

In Terminals, the top line was affected by lower volumes and storage income, both a factor of lower demand and the release of port congestion. Revenue in Terminals decreased to USD 876m from USD 1.1bn, but strong cost control contributed to continued solid financial performance in Terminals.

Q1 was marked by continued destocking in Europe and especially North America. While it is difficult to predict the exact timing, Maersk expects volumes to gradually pick up in the second half of the year.

Guidance for 2023

Guidance remains unchanged and is still based on the expectation that inventory correction will be complete by the end of H1, leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%. Ocean expects to grow in line with market.

In Q1 2023, A.P. Moller – Maersk recognised USD 374m of the previously communicated USD 450m impairment and restructuring charge for the A.P. Moller – Maersk brands.

Cash distribution to shareholders

A total distribution of cash to shareholders of USD 10.1bn took place during Q1 2023 through dividends paid of USD 9.4bn and share buy-backs of USD 718m.

Financial highlights

Highlights Q1

Revenue

EBITDA

EBIT

CAPEX

Sensitivity guidance

Financial performance for A.P. Moller - Maersk for 2023 depends on several factors subject to uncertainities related to the given the uncertain macroeconomic conditions, bunker fuel prices and freight rates. All else being equal, the sensitivities for 2023 for four key assumptions are listed below:

About A.P. Moller - Maersk

A.P. Moller - Maersk is an integrated logistics company working to connect and simplify its customers’ supply chains. As a global leader in shipping services, the company operates in more than 130 countries and employs over 110,000 people world-wide. Maersk is aiming to reach net zero emissions by 2040 across the entire business with new technologies, new vessels, and green fuels.