Maersk posts net profit of $30bn but expects to plunge 85-95% by 2023. Maersk Group posted an operating profit (EBIT) of $30.8bn for 2022, surpassing revenue for the last year by 57%, but the group warned that this year’s financial results could be a fraction of its latest earnings, Alphaliner reports.
The Danish company now forecasts EBIT of between $2bn and $5bn by 2023 based on “very poor profitability” for its Ocean (container shipping) division in the second half of the year. Investment analysts have even raised the possibility of quarterly losses in the pool as contract rates return to trading in line with spot rates and costs potentially rise. However, the group said it believed bunker prices would fall in the second half of the year, Alphaliner retorts.
Fourth-quarter earnings fall year-over-year
According to Alphaliner, at the segment level, Maersk’s Ocean division posted EBIT of USD 29.1 billion for 2022 (2021: USD 17.9 billion) on revenues of USD 64.3 billion (2021: 48.2 billion).
Fourth quarter profit was lower than a year ago ($4.8bn) as average rates fell to $1,934 per teu, and container throughput fell to 5.6 Mteu, its lowest quarterly movements since 2017.
In fact, Maersk confirmed that lower volumes, rather than lower rates, drove the profit decline in the last three months of the year. Maersk said it had anticipated falling rates but not the sharp drop in volumes, which fell 20% overall in the US and Europe due to inventory corrections.
Wide range of EBIT for 2023
Alphaliner also reports that the line expects container volume growth to be in the range of -2.5% to 0.5% in 2023, with demand expected to stabilize in the second half of the year. However, supply-side factors will pose a risk to container activities, leading to the wide EBIT forecast range.
He pointed out that other companies in the group would progressively increase their contribution to the results from the second half of the year.
It ends by stating that Maersk is now doubling down on its “integrator” strategy in which it combines its various activities under a “by Maersk” approach, with cargo managed, fulfilled and transported by Maersk. He said he would initially focus on creating scalability, increasing productivity and launching new products.
Meanwhile, placed in historical context, the low end of the group’s 2023 EBIT prediction remains higher than the group’s operating profit in 2016-2019, but below profit in 2013-2015.