Maersk reports profits fall to USD 2.3MM Q4 warns losses

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Maersk Group reported net profit of $2.3bn for the first quarter of 2023, a sharp drop from $6.8bn a year earlier, and said it was proactively managing costs in anticipation of flat shipping rates for the year, but warns of losses for Q4, says Alphaliner.

They report that revenue from the group’s Ocean division hit $9.87bn, a 37% drop from Q1 2022, while the division’s operating profit (EBIT) fell a sizeable 72% to $1.97bn. USD, which equates to an operating margin of 19.9%.

Although the group said it was doing well as the market normalized, it stands by full-year group EBIT guidance of $2bn to $5bn.

Considering that the group’s EBIT already reaches USD 2.3bn in the first quarter, this opens up the possibility of losses later in the year. The first quarter was expected to be the strongest quarter of 2023, Maersk told Alphaliner.

Low volumes in all segments

Alphaliner reports that Maersk earned an average of $1,436 per teu on its shipping operations in the first quarter, down from $2,276 in the same period a year ago, and a further drop from the $1,934 earned in the last quarter. of 2022.

Lifts reached 5.4 Mteu, up from 6.0 Mteu a year earlier and 5.6 Mteu in Q4 2022, as volumes remained low “in all segments” due to reduced production. stock.

Capacity adjustments, including blanks and idle, were widely implemented during the quarter with utilization reaching 88%. The group said similar efforts by other lines had resulted in an “encouraging” stabilization in rates.

The carrier has now concluded around 75% of its annual contract volumes, with rates trending towards but still above spot rates. About 70% of its total volume (all routes) will be under contract in 2023, up from 68% in 2022.

The carrier’s cost containment has focused on slow sailing and better organization of the network, with the deployment of more efficient vessels and better utilization.

He ends by mentioning that Maersk’s guidance for the full year is based on “essentially flat” ocean rates and an anticipated improvement in volumes in the second half of the year. While operating margins of nearly 20% for the quarter were well below the 49% peak reached in the second quarter of 2022, they remain well above pre-pandemic levels.

Source: Alphaliner

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