Solid quarter for Maersk with rate and volume growth

Solid quarter for Maersk with rate and volume growth

Maersk delivered solid progress in the second quarter 2019 with underlying profit increasing from US$15m to US$134m on the back of increases in volume and freight rates.

Total revenue increased slightly to US$9.6bn on par with last year while EBITDA rose by 17% to US$1.4bn.

During the first half of 2019, the company formed on sales organisation, with a focus on giving customers integrated services and offering them more products in an aim to improve financial results across the business.

Søren Skou, CEO of A.P. Moller – Maersk, said: “The transformation progressed further with an improved cash return on invested capital of 6.9% and synergies of US$1bn realised earlier than expected.

“Growth in revenue and gross profit in Logistics & Services still need to improve as we continue to build capabilities within logistics and services.”

In Q2 2019, the ocean business continued to recover with enhanced unit cost, utilisation and reliability and revenue grew 2.9% to US$7.2bn.

Revenue in Terminals & Towage grew 13% to US$957m compared to Q2 last year. In gateway terminals, volume in Q2 grew by 8.5% compared to last year, leading to higher utilisation. EBITDA increased by 11%, partly offset by one-off items.

In Logistics & Services, EBITDA grew to US$61m in Q2 compared to US$52m in the same quarter last year. Revenue was at US$1.5bn, positively impacted by increased revenue in supply chain management, but offset by declining revenue from sea and air freight forwarding.

The latest example of a digital innovation to improve customer experience is Maersk Spot, which simplifies the buying process and offers increased visibility and reliability by enabling customers to search and get competitive rates online, while ensuring cargo gets on board the selected vessel.

While EBITDA for the first half year improved by US$500m to US$2.6bn, Maersk reiterates its full-year guidance for 2019 of an EBITDA of around US%5.0bn.

Skou added: “We reaffirm our guidance for 2019, while the macro environment continues to be subject to considerable uncertainties.”

The guidance continues to be subject to considerable uncertainties due to the weaker macroeconomic conditions and other external factors impacting container freight rates, bunker prices and foreign exchange rates.