Maersk CEO Søren Skou: “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.”
Container transport and logistics big A.P. Moller – Maersk (Maersk) at the moment once more reported file outcomes, however analysts gave the impression to be extra centered on CEO Søren Skou’s cautionary phrases about darkish clouds on the financial horizon and the corporate’s share took a hit of about 5.5%, on the shut of buying and selling in Copenhagen.
Maersk reported increased third quarter earnings in all its three important companies—Ocean, Logistics & Services and Terminals—in comparison with the identical quarter final 12 months. Revenue elevated by 37% to $22.8 billion, and each EBITDA ($10.9 billion) and EBIT ($9.5) billion elevated round 60% in comparison with third quarter 2021.
FREIGHT RATES HAVE PEAKED
“Our third quarter result was another record and the 16th quarter in a row with year-on-year earnings growth. Ocean freight rates, which have driven the exceptional results we have delivered in 2022, were again up both year-on-year and compared to the second quarter,” mentioned Maersk CEO Søren Skou. “However, it is clear that freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion. 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 $4 billion in one quarter, and we expect to continue to outgrow the market in Logistics based on new customer wins.”
DARK CLOUDS
“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,” mentioned Skou. “This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand. While we expect a slow-down of the global economy to lead to a softer market in Ocean, we will continue to pursue the growth opportunities within our Logistics business. As a trusted partner, we are ready to support our customers in rethinking their supply chain needs through what is likely to be a period of a more volatile business environment.”
MARKET TRENDS
Demand for logistics companies moderated throughout world provide chains in third quarter 2022, says the corporate. Supply-side bottlenecks continued to pose challenges, however Maersk sees indicators of easing as demand slows and COVID 19-related restrictions in China diminish. Freight and constitution charges declined in third 2022 relative to the earlier quarter because the anticipated normalization gained momentum by way of the quarter. Global container volumes are estimated to have declined by 3% year-on-year within the third quarter, whereas world air cargo volumes, measured in CTKs, dropped by 9% in July/August (IATA). As a results of slowing financial exercise, world container demand is predicted to contract by between 2% and 4% in 2022.
GUIDANCE
Maersk confirms its full 12 months steering for an underlying EBITDA of round $37.0 billion, an underlying EBIT of round %$31.0 billion and a free money movement above $24.0 billion.
Capex steering for 2022-2023 stays unchanged at $9.0-10.0 billion.
There’s a lot, way more in Maersk’s full third quarter report.
