A.P. Moller-Maersk has upgraded its full-year 2024 guidance following a robust third-quarter performance, with financial results significantly outpacing the previous year. The Danish shipping and logistics giant reported broad-based growth across its divisions, led by gains in Ocean and bolstered by improved margins in Logistics & Services and Terminals.
The strong results prompted Maersk to raise its underlying EBIT projection to between USD 5.2 billion and USD 5.7 billion, up from the previous forecast of USD 3.0 billion to USD 5.0 billion.
Division highlights and performance drivers
In the Ocean segment, Maersk’s core shipping business, revenue rose by 41% year-on-year to reach USD 11.1 billion, driven primarily by increased freight rates and volume growth. This led to an EBIT increase of USD 2.9 billion and a margin of 25.5%. Cost pressures linked to rerouting vessels south of the Cape of Good Hope due to geopolitical tensions were partially offset by operational efficiencies.
“Ocean’s profitability improvement was driven by the higher freight rates as well as positive volume growth, culminating in a 41% increase in revenue,” said Vincent Clerc, CEO of Maersk. “The network re-routing south of the Cape of Good Hope remained a significant driver of our cost base, impacting bunker consumption and overall operating costs. These cost pressures were largely offset by efficient operational execution.”
The Logistics & Services division recorded an 11% increase in revenue from the same period last year, totalling USD 3.9 billion. This growth was attributed to heightened volumes across most product categories, particularly Lead Logistics and Air. The division’s EBIT rose to USD 200 million, with a margin of 5.1%, representing a steady recovery in profitability.
Terminals also delivered strong quarterly results, posting revenue of USD 1.2 billion, a significant year-on-year increase driven by higher volumes and improved tariffs in key markets, especially North America. Terminals achieved its highest EBITDA since early 2022, reaching USD 424 million, and closed the quarter with a return on invested capital (ROIC) of 13%.
Financial guidance for 2024
Maersk’s updated guidance anticipates an underlying EBITDA of USD 11.0 to 11.5 billion, up from the previously forecasted range of USD 9.0 to 11.0 billion. Free cash flow expectations were also raised, now projected to reach USD 3.0 billion or higher.
While the company’s capital expenditure (CAPEX) forecasts for 2023-2024 and 2024-2025 remain unchanged, at USD 8.0 to 9.0 billion and USD 10.0 to 11.0 billion respectively, Maersk emphasised that its performance remains subject to several macroeconomic uncertainties, including fuel prices, freight rates, and currency exchange rates. A USD 100 fluctuation in container freight rates, for instance, could impact EBIT by approximately USD 0.3 billion.
Financial highlights
During the third quarter, Maersk achieved consolidated revenue of USD 15.8 billion, up from USD 12.1 billion in the corresponding period in 2023. Consolidated EBITDA surged to USD 4.8 billion, a significant increase from USD 1.9 billion last year. The group’s consolidated EBIT reached USD 3.3 billion, up sharply from USD 538 million in the prior year.