Maersk Q1 results in line with expectations amid ongoing Red Sea disruptions

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A.P. Moller – Maersk (Maersk) delivered a first quarter in line with expectations showing a strong recovery in earnings compared to the fourth quarter of 2023. Results were driven by a good performance in Terminals and the combination of higher demand and a prolonged Red Sea crisis.

Profit before depreciation, amortisation and impairment losses, etc. (EBITDA) for Q1 was $1.6bn on revenue of $12.35bn, down from nearly $4bn on revenue of $14.2bn in Q1 2023 but up on Q4 2023’s EBIT loss approaching $0.5bn on revenue of $11.7bn.

Maersk CEO Vincent Clerc said: “We had a positive start to the year with a first quarter developing precisely as we expected. Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched. This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.

“However, we still anticipate the high number of new vessels being delivered during this and next year to eventually offset these factors and put the ocean markets under renewed pressure. We therefore relentlessly continue to pursue our cost agenda with the aim of rolling back the disruption linked cost in Ocean and restoring margins in Logistics & Services.”

By sector, Ocean results were impacted by the situation in the Red Sea with increased market rates and costs due to the supply chain disruptions. Strong volumes, high capacity utilisation and continued cost discipline ensured improved results compared to the previous quarter.

Logistics & Services saw significant growth in volumes, while margin was at an unsatisfactory level on the back of too low utilization in some of our warehouses and short-term challenges implementing new customer contracts in the ground freight business in North America.
Terminals started the year with strong results supported by good volumes growth. Strong cost management and high productivity helped improve margins.

Maersk continued to streamline its portfolio to focus on end-to-end logistics with the spin-off of Svitzer. The demerger was approved by an Extraordinary General Meeting on April 26th and completed on April 30th, with Svitzer Group A/S now listed on the Nasdaq Copenhagen.

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