Maersk forecasts 80 per cent profit drop from record year

Maersk forecasts 80 per cent profit drop

Maersk expects an abrupt decline from booming profits in 2022 as the container shipping bull run comes to an end.

Revenue in 2022 increased by 32 per cent to $81.5 billion, while EBIT (operating profit) soared to $30.9 billion, or 57 per cent year-on-year.

The carrier owes its results to strong performance across all businesses, especially in the ocean segment, due to high freight rates and strong demand in the first half of the year.

This led to a 33 per cent increase in ocean revenue. The logistics and services segment also saw an increase of 47 per cent in revenue, with the organic contribution coming from top 200 customers as the company continued to develop integrated solutions for end-to-end supply chain needs.

READ: Maersk completes Martin Bencher Group buyout

The terminals segment reported a record EBIT of $1.2 billion, supported by solid volume growth and high congestion-related storage income.

“2022 was remarkable in more than one way. While we report the best financial result in the history of the company, we have also taken the partnerships with our customers to a new level by supporting their supply chains end to end during highly disruptive times,” said Vincent Clerc, CEO of Maersk.

“As we enter a year with challenging macro-outlook and new types of uncertainties for our customers, we are determined to speed up our business transformation and increase our operational excellence to seize the unique opportunities in front of us.”

For 2023, the company expects the inventory correction to be complete by the end of the first half, leading to a “more balanced demand environment”.

As the global ocean container market growth is expected to be in the range of -2.5 per cent to +0.5 per cent, Maersk expects to grow in line with the market, with an underlying EBITDA of $8 billion to $11 billion and an underlying EBIT of $2 billion to $5 billion forecasted for the full year 2023 – a decline of around 84 per cent from last year.

The CAPEX guidance for 2022-2023 is maintained at $9 billion to 10 billion, and for 2023-2024, the expectation for accumulated CAPEX is $10 billion to $11 billion, driven by investment in the integrator strategy, technology, and decarbonisation.

In Q12023, the company expects to incur an impairment and restructuring charge of $450 million in conjunction with the restructuring of its brands, but this will not impact its financial guidance according to its estimates.

Maersk and MSC recently announced their mutual decision to terminate the 2M alliance in January 2025 and pursue their own individual strategies.

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