Maersk Upgrades Income Outlook

A Maersk Triple-E class container cargo ship being loaded in Shanghai Yangshan Port

A.P. Moeller-Maersk (Maersk)’s earnings before interest, tax, depreciation and amortization (EBITDA) improved 14% to US$1.7 billion in the third quarter of 2019 as the carrier performed well despite a global slowdown in container demand.

In its Q3 figures, Maersk said its revenue decreased 0.9% to $10.1 billion and its operating cash flow increased by 25% to £1.7 billion.

Soren Skou, Maersk’s CEO and acting COO following the departure of Soren Toft, said: “While the global container demand, as expected, was lower in Q3 due to weaker growth in the global economy, A.P. Moller – Maersk continued to improve the operating results.”

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Skou went on to say that Maersk’s solid performance was largely down to its Ocean segment, which improved by 13% (EBITDA). This the carrier said in a statement, reflects its focus on profitability through capacity management and operational performance.

This meant it was able to mitigate lower freight rates and relatively small volume growth in Q3 of 2.1%. Ocean’s revenue was $7.3 billion, which is the same as Q3 2018.

Its Terminals and Towage EBITDA also increased, this time by $313 million, as did its revenue, which jumped by 5.8%. In gateway terminals, the increase in EBITDA of 33% was driven greater volume growth of 9.2%.

Logistics and Services progressed with a gross profit of 13% following increased activities in intermodal and warehousing and distribution. However, this was partly offset by a drop in revenue in air and sea freight forwarding.

Maersk expects EBITDA for 2019 to be in the range of $5.4 to 5.8 billion, up from the previously communicated estimation of $5 billion.

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