Maersk Expands Logistics Business and Achieves Record Results

A.P. Moller – Maersk (Maersk) delivered record results in the second quarter of 2022. Revenue increased by 52 percentage points and the result more than doubled compared to the same quarter last year. The results were driven by the persistently exceptional market conditions and the ongoing momentum of the strategic transformation focused on integrated logistics.

(Kopenhagen) Due to the strong performance in the first half of 2022, Maersk has raised its forecast for the full year 2022 and increased the current share buyback program.

“We achieved an exceptionally strong result in the second quarter, marking the 15th consecutive quarter of improved results compared to the previous year. We are pleased with our performance in the first half of 2022, which clearly demonstrates the progress and great work of the entire Maersk team that has transformed the company into a global integrated logistics provider,” says Søren Skou, CEO of A.P. Moller – Maersk.

In Q2, revenue rose to USD 21.7 billion, EBITDA and EBIT to USD 10.3 billion and USD 9 billion respectively, and free cash flow to USD 6.8 billion. The Q2 net result for the first half amounted to USD 8.6 billion or USD 15.4 billion. The return on invested capital (ROIC) was 62.5 percent over the last 12 months.

“The result was supported by strong freight rates in Ocean, rapid profitable growth in logistics, and a consistently solid performance at the terminals. Volumes in Ocean were weaker as congestion persisted and the war in Ukraine weighed on consumer confidence, particularly in Europe. However, in logistics, we increased volumes above the market as our Ocean customers continue to engage with our value proposition, leading to an organic revenue growth of 36 percent and organic growth of over 30 percent for the 6th consecutive quarter,” says Søren Skou, CEO of A.P. Moller – Maersk.

New Customer Acquisition in Logistics

In the Ocean segment, revenue in the second quarter rose to USD 17.4 billion and EBIT to USD 8.5 billion. The higher freight rates were partially offset by 7.4% lower volumes and increased fuel, handling, and network costs.

In Q2, Maersk maintained its strong momentum in delivering integrated logistics solutions for customers. Revenue in logistics increased by 61 percent to USD 3.5 billion, and EBIT rose to USD 234 million, mainly due to higher volumes from new customer acquisition and increased spending from existing customers. Maersk continued to invest in its logistics portfolio and capabilities; in Q2, the acquisitions of logistics specialist Pilot Freight Services and global air freight expert Senator International were completed, and Maersk further strengthened its air freight offering with the introduction of Maersk Air Freight.

In terminals, revenue rose to USD 1.1 billion and EBIT to USD 316 million, primarily driven by strong import demand in the USA and above-market growth in Asia, as well as higher storage revenues, which were partially offset by increased costs.

Market Situation Further Weakened

Global demand for logistics services continued to weaken in the second quarter of 2022 within global supply chains. Freight rates slightly declined over the course of the quarter but remained historically high as supply chain congestion increased worldwide. Global container volume decreased by 2.3 percent compared to the second quarter of 2021, while global air freight volume (CTK) was down 9.4 percent in April/May. Geopolitical uncertainty and higher inflation due to rising energy prices continued to weigh on consumer sentiment and growth expectations. Against this backdrop, global container demand is now expected to be at the lower end of the projected range of -1% to +1% for 2022.

2022 Outlook

As announced in a trading update on August 2, Maersk expects an adjusted EBITDA of around USD 37 billion, an adjusted EBIT of around USD 31 billion, and free cash flow of over USD 24 billion for the full year 2022. This is based on the strong performance in the first half of 2022 and a gradual normalization of sea freight rates in the fourth quarter of 2022.

Based on the improved forecast, the Board of Directors has decided to increase the ongoing share buyback program for the years 2022-2025 by USD 500 million annually from USD 2.5 billion to USD 3.0 billion.

Photo: © Maersk