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Maersk sheds $5bn in revenue in 'strongest' 2023 quarter

Maersk A Maersk container in port
Maersk expects the first quarter 2023 will be the strongest of the year, but revenues were down 26% or $5.1bn compared to Q1 2022.

Maersk said its ocean segment saw first quarter 2023 revenues of $9.9bn, down $5.7bn compared to the first quarter 2022 as demand, volumes and freight rates fell. Maersk pegged global container demand at between 7% and 10% lower in the first quarter 2023, a loss of around 19m feu globally.

“The average loaded freight rates decreased by 37% compared to Q1 2022 and 26% compared to Q4 2022, driven by contract and shipment rates on routes from Asia to Europe and to North America,” said Maersk. Loaded volumes also fell by 9.4% on-year.

The volume drop was led by destocking and lower imports in Europe and North America, said Maersk, but it expects restocking to support volumes sometime in the second half of the year. The company also noted the market impact of increased vessel deliveries at a time of low scrapping.

Profit for the first quarter was $2.3bn, just over a third of the $6.8bn recorded in Q1 2022, and below the $2.7bn in 2021. The result remains significantly higher than pre-pandemic levels.

The first quarter developments were expected and have been branded a normalisation by Maersk. The company has forecast a continued softening of the market throughout 2023, leaving Q3 2022 as the market peak.

“Proactive cost containment measures have been successful, and the Ocean contract negotiation season is proceeding in line with expectations,” said Maersk.

The group’s terminal division also saw lower revenue and easing port congestion and lower demand brought lower volumes and lower income from storage. Terminals revenue of $876m compared to $1.1bn in the year-ago period.

The Logistics and Services segment bucked the falling trend as Maersk continues its journey to become an integrated logistics platform. Revenue was up 21% to $3.5bn as acquisitions were consolidated. Beneath the internal changes, the market was hit by decreased volumes, lower air freight rates and weaker eCommerce demand, offset by new commercial wins for Maersk.

“We delivered a solid financial performance in a challenging market with lower demand caused by a continued destocking. Visibility remains low for the remainder of the year and moving through this market normalisation, we remain focused on proactively managing costs,” said Vincent Clerc, CEO of Maersk.

The 2023 forecast was unchanged, with EBIT at $2.0bn to $5.0bn.