4 May (Lloyd's List) - MAERSK saw first-quarter earnings decline and expects the remainder of the year to be even weaker, according to a statement.
Earnings before interest, tax, depreciation and amortisation was nearly $4bn for the three months ending March 31, compared with the year-earlier level of $9bn, or $6.5bn in the fourth quarter of 2022. Revenue fell 26.4% to $14.2bn.
Maersk said the fully-year guidance of ebitda of $8bn-$11bn and ebit of $2bn-$5bn remain unchanged, with the first quarter expected to be the strongest quarter of this year.
“We delivered a solid financial performance in a challenging market, with lower demand caused by a continued destocking,” said chief executive Vincent Clerc. “Visibility remains low for the remainder of the year and moving through this market normalisation, we remain focused on proactively managing costs.”
He added that the Danish giant’s customers continued to value the company’s integrated logistics solutions and close partnership it provides. The core Ocean business, which has been affected by lower demand and freight rates, saw its ebitda down 59.2% year on year to $3.4bn on a 36.6% decline in revenue to $9.9bn between January and March.
“However, proactive cost containment measures have been successful, and the Ocean contract negotiation season is proceeding in line with expectations,” said Maersk.
The company’s logistics and service division fared better, with a flat growth in ebitda to $316m and a more than 20% increase in revenue to $3.5bn during the reporting period. The performance was, however, mainly driven by the consolidation of acquisitions.
The first quarter “was affected by lower volumes caused by inventory corrections, especially with North American and European retailers, which was partially offset by new commercial wins,” said Maersk. “Additionally, underlying business performance was impacted by lower rates in air freight and weaker demand in e-commerce.”
The company’s prediction for global container demand growth for 2023 remains in the range of -2.5% to 0.5%, based on the expectation that inventory correction will complete by the end of the first half, leading to a more balanced demand environment.
