A.P. Moller – Maersk (Maersk) has published its operational results for 2021, shattering previous financial records.
In 2021, the company saw its revenues reach $61.8 billion, an increase of 55 per cent compared to the financial results of the previous year.
Additionally, EBITDA tripled to $24 billion and free cash flow was $16.5 billion. This allowed Maersk to make strategic investments into decarbonisation and logistics growth, combined with strong cash distribution to shareholders.
The company recently accelerated its net zero emissions target to 2040. Tangible near-term targets for 2030 were also set to ensure significant progress.
“Exceptional market conditions led to record-high growth and profitability in Maersk, however it also led to supply chain disruptions and severe challenges for our customers,” said Søren Skou, CEO of Maersk.
“We spent tremendous efforts in mitigating bottlenecks by expanding capacity across Ocean, improving productivity in Terminals, and growing our global logistics footprint.
“We will continue these efforts as we see the current market situation persist into Q2. At the same time, we see conversations with customers change from procurement-led freight rate discussions to more holistic conversations on how we truly partner to keep supply chains running end-to-end. This clearly validates our strategy.”
Ocean income increased substantially with a revenue of $48.2 billion in 2021, compared to $29.2 billion the previous year. This was driven by high freight rates due to global supply chain disruptions caused by the COVID-19 pandemic.
Profitability also continued to grow in the terminals sector. Driven by strong volumes and storage income, return on capital investment (ROCI) increased to 10.9 per cent. The company’s minimum target for ROIC is 9 per cent.
Digital solutions and services continued to be implemented throughout the company’s operations as turnover on Maersk.com reached $38 billion. Traffic also increased 15 per cent as customers continued to adopt the digital solutions further.
Also, Maersk continued to strengthen its Logistics & Services business, outperforming market growth with revenue growth of 41 per cent to $9.8 billion. Six businesses were acquired within air, e-commerce, warehousing, and fulfilment. One example of this was in November when the company took a majority share in South African freight firm Grindrod.
A total of 85 new warehouses also opened in the 12-month period, improving capabilities and footprint across the company’s product portfolio. A new 200,000-square-foot warehouse is also set to be opened in Chattogram, Bangladesh following an agreement with Ispahani Summit Alliance Terminals Limited.
Looking ahead in 2022, Maersk expects the current market situation to continue into Q2 with a normalisation to occur early in the second half of the year.
For full year 2022, the company is expecting:
- An underlying EBITDA of around $24 billion
- Underlying EBIT of around $19 billion
- Free cash flow of above $15 billion
Global container demand is expected to increase by around 2-4 per cent. This is subject to uncertainties in the global supply chain due to problems brought on by the COVID-19 pandemic.
For 2022-2023, the expectation for the accumulated capital expenditure (CAPEX) is $9 billion-$10 billion, driven by growth in Logistics & Services and ESG investments.
Some of Maersk’s operational highlights from 2021 include:
- The unveiling of its new 16,000 TEU vessels powered by carbon-neutral methanol
- The signing of a Memorandum of Understanding (MoU) with e-commerce furniture company Zinus, becoming its preferred global integrator of logistics
- The opening of its first warehousing and distribution facility in the UAE
- Investing in Vertoro to develop green lignin marine fuels and trialling a sustainable intermodal transportation solution in Japan