A.P. Moller Maersk growth amid uncertain markets

Maersk Line

A.P. Moller Maersk, the danish transport and logistics company reported revenue growth realising synergies derived from business integration under its strategic business transformation. Furthermore, other strategic moves by the desintegration of bussines from the transport and logistics business also pave the way for uncertain conditions amid uncertain markets.

Compering year to year results, revenue grew 24% which was mainly pushed by the acquisition of Hamburg Süd and its effect. In addition, the revenue was also affected positively by the increase in service of customers supply chain management and also gateway and towage. Regarding non Ocean organic growth, revenue increased 12% year to year.

In Q1, the inflow capacity of Hamburg Süd and network issues affected the unit cost which was improved in Q2. Regardless this improvement, higher bunker impacted negatively the profitability. Furthermore, until perpetuity Maersk expects lower unit costs and higher freight rates.

Please see related article: SeaIntelligence: “Good Progress For Maersk In The Second Quarter

Across A.P. Moller Maersk’s integration of transport, logistics and port businesses, have resulted in synergies of around USD 200 million. These synergies reflected the collaboration between Ocean and gateway terminals with reported equity-weighted volume of 8.8% with the Ocean segment growing 20% and external customers growing 4.4%.

For Hamburg Süd, synergies of around USD 140 million have been realised in the first half of 2018 within procurement, network optimisation and collaboration with APM Terminals.

The market lookout is full of uncertainties due to the current risk of further restrictions on global trade and other factors impacting container freight rates, bunker prices and rate of exchange. Also, future overcapacity from newbuildings may also impact on the longrun.

Furthermore, A.P. Moller – Maersk’s recent actions to list Maersk Drilling as a standalone operational company on Nasdaq Copenhaguen for listing in 2019 highlights its effort to focus on transport and logistics. This move, made in essentially to ensure the long-term prospects for its shareholders.


Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.