Maersk earnings rise in third quarter
Maersk’s bet on transforming its business appears to be paying off, with its non-Ocean segment now accounting for a third of its revenues. But its guidance for the full year has been adjusted down again.
Like for like revenues, excluding Hamburg Süd, were up 12%.
Maersk reported revenue growth of 15% In its non-ocean segment, which now makes up a third of its total revenues. In the Ocean segment, earnings before interest, tax, depreciation and amortisation rose to
“Well into our transformation, we are progressing with the integration of our business to better serve customers and unlock the full growth potential within Logistics & Services,” said chief executive Søren Skou. “As a result, I am pleased to see revenue growth in the third quarter across the business, including supply chain services.”
Volumes in the Ocean segment grew 27%, or 5% excluding Hamburg Süd, which was above the estimated market growth of 2.7%, but lower than anticipated. Moreover, last year’s third-quarter figures were affected by the cyber-attack the company suffered.
"Our business performance in Ocean is still challenged by increased bunker prices not being fully compensated through higher freight rates,” Mr Skou said. “However, we continue to see improved results in the third quarter after a very weak start to 2018."
Underlying profit in the quarter was slightly down at $251m compared to $254m last year. But despite bunker costs rising by 47%, earnings before interest, tax, depreciation and amortisation increased by 16%.
But Maersk has adjusted its full-year outlook again from the $3.5bn-$4.2bn it announced in August to $3.6-$4bn.
The company warned that global container trade continued to lose momentum in the third quarter, with growth down to around 2.7% compared to 2017.
“Year-to-date, global container trade has increased by 4.2% compared with the same period last year, a much slower pace of growth than the 5.8% recorded in 2017,” Maersk said.
Maersk was able to achieve an average freight rate of $1,929 per feu, up 5.5% on last year. Revenues in Ocean were up by a third to $7.3bn as volumes rose 27% to 3.3m feu, with the increase primarily from the inclusion of Hamburg Süd volumes.
“The volume increase was mainly driven by north-south and intra-regional trades due to Hamburg Süd’s position in these markets,” Maersk said.
“Despite the positive volume growth, the container demand was weaker than expected, especially on the Asia-Europe trade, hence the volume was lower than expected in third quarter. The volume decreased by 1.9% or 65,000 feu compared to the second quarter of 2018.”