Increased freight rates caused by strong demand coupled with significant operational challenges such as bottlenecks, lack of capacity and equipment shortages in global supply chains led Maersk to earnings and growth across all its businesses in ocean, port services and logistics during the first quarter of the year.
Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) of the Danish carrier increased to US$4 billion and EBIT to US$3.1 billion, while revenue improved by 30% to US$12.4 billion.
The results reflect the high volumes, which increased by 5.7%, significant spikes in freight rates of 35% and lower bunker fuel prices.
“A.P. Moller – Maersk delivered an exceptionally strong performance in Q1 2021 with record profit for the quarter,” highlighted Søren Skou, CEO of A.P. Moller – Maersk.
“We remain focused on the long-term transformation of A.P. Moller – Maersk, prioritising customers’ demand for integrated logistics. Our integrator strategy was validated by strong customer support during Q1. As we change the conversations with customers from being short-term transactional to becoming long-term value-based, we lay the foundation for further, stable growth,” Skou explains.
The results came in a persistently difficult environment where countries are still contending with the effects of the pandemic, according to Maersk, which noted that customers’ demand for truly integrated supply chains and simple, self-service solutions has never been more evident and this provides momentum, especially for logistics and digital solutions.
As part of the full-year guidance for 2021, A.P. Moller – Maersk now expects the current situation, with the demand surge leading to bottlenecks in the supply chain and equipment shortages, to continue well into the fourth quarter of 2021 versus previous expectations which was a normalisation after Q1. As expected, profitability in Q1 2021 was above Q4 2020.
For the years 2021-2022, the accumulated Capital expenditure (CAPEX) is now expected to be around US$7 billion.