In line with its updated guidance for 2021 issued last month the company reported an EBITDA of $24bn for 2021, nearly three times the $8.2bn EBITDA Maersk reported for 2020. Maersk’s revenues were up 55% to $61.8bn as supply chain disruption drove container freight rates record highs last year.
“Exceptional market conditions led to record-high growth and profitability in AP Moller - Maersk, however it also led to supply chain disruptions and severe challenges for our customers,” commented Soren Skou, CEO of AP Moller – Maersk.
The company reported an EBIT of $17.96bn for its core ocean freight business in 2021 compared to $3.2bn in the previous year. EBIT margin stood at 37.2% for 2021 against 11% in the previous year.
The year past year has seen container freight rates soaring to previously unimaginable levels and Maersk has moved to lock-in rates on long-term contracts, which it has prioritised over spot shipments. Long term contracts now represent 65% of the line’s volumes compared to 50% a year earlier.
“The average loaded freight rate increased by 66% to $3,318 per feu ($2,000 per feu), primarily driven by long-term contracts renewing at significant higher rates, as well as short-term rates driven by strong demand combined with bottlenecks and congestions driving rate increases,” Maersk said in its annual report.
Maersk is continuing plough some of its huge profits into expanding its logistics and supply chain offerings. Acquisitions in 2021 included Visible Supply Chain Management, B2C Europe, HUUB and the intention to acquire LF Logistics. This strategy is continuing with Maersk announcing the $1.68bn purchase of Pilot Freight Services at the same time as its annual financial results.
We spent tremendous efforts in mitigating bottlenecks by expanding capacity across ocean, improving productivity in terminals and growing our global logistics footprint,” Skou said.
“We will continue these efforts as we see the current market situation persist into Q2. At the same time, we see conversations with customers change from procurement-led freight rate discussions to more holistic conversations on how we truly partner to keep supply chains running end-to-end. This clearly validates our strategy.”
With the current market situation forecast to continue through Q2 2022 before normalising in the second half of the year Maersk is expects more of the same in terms of profitability. Guidance for underlying EBITDA in 2022 is $24bn, the same level as it just reported for 2021, with an EBIT forecast at $19bn.
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