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Maersk calls market peak, reports more record results

Maersk A Maersk container in port
Maersk reported another record quarterly performance and maintained its full-year guidance despite a continued downward trend in volumes.

The group said its third quarter earnings for 2022 were the 16th consecutive results with year-on-year earnings growth. Revenues were up 37% and both EBIT and EBITDA rose around 60%.

Loaded volumes at Maersk fell from 3.3m feu in Q3 2021 to 3.0m feu in Q3 2022, slightly lower than Q2 2022 volumes of 3.0m. Freight rates were more buoyant at $5,056 per feu in Q3 2022, up from $4,983 per feu in Q2 2022 and 42% above the $3,561 recorded in Q3 2021.

The higher rates and lower volumes brought a 38% increase in freight revenue compared to Q3 2021, and overall revenue of $18bn for the ocean segment.

Despite the increase in profitability for its Ocean segment in the quarter, Maersk said: “the extraordinary earnings have peaked as freight rates started to decline during the quarter due to weakening customer demand, coupled with markets beginning to normalize with less supply chain disruptions and progressive release of congestion.”

Further chipping away at the strong revenue figures was a 21% increase in total operating costs, driven by a 69% increase in bunker costs as average bunker prices rose by 78% to $895 per tonne. Bunker consumption fell by 4.8% along with bunker efficiency, which dropped by 5.7%.

Maersk estimated that global container volumes fell by 3% on-year in the third quarter, and forecast global container demand reduction of between 2% and 4% in 2022, down from its previous forecast of between 1% growth and 1% negative growth.

”As anticipated all year, earnings in Ocean will come down in the coming periods. Our overall transformation momentum remained very strong as we continue to grow our Logistics business rapidly. For the first time, revenue in Logistics exceeded $4bn in one quarter, and we expect to continue to outgrow the market in Logistics based on new customer wins,” said Søren Skou, CEO of A.P. Moller - Maersk.

“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon. This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand,” said Skou.

In its Terminals business, Maersk recorded a slight uptick in moves to 3.3m from 3.2m in Q3 2021, owing to a 0.1m improvement in moves for external customers. Revenue per move rose from $314 in Q3 2021 to $335 in Q3 2022.

“While rising inflation and high energy prices put pressure on the cost base, results remain healthy as terminal tariffs have been increased accordingly. Investment levels increased significantly as Terminals invests in growth, efficiency and automation,” said Maersk.

The group’s 2022 guidance remains unchanged at $37.0bn underlying EBITDA, $31.0bn underlying EBIT and free cash flow of over $24.0bn.