As the container shipping market seems on the edge of a violent correction, A.P. Moller-Maersk published its fourth quarter and full year 2024 results last week.
For both the quarter and the full year, Maersk described its results as “strong” with some justification. Over the financial year 2024 pre-tax profits were up by 56% to US$6.8bn whilst revenue was 8.6% higher at US$55.482bn.
Performance was strong across all of the major businesses of the Maersk Group. In the core ‘Ocean’ shipping business demand was moderate, with volumes up 3.6% in terms of containers moved, but freight rates remained very good, with revenue up 11% year-on-year for the full year 2024. It is noticeable that the market softened in the fourth quarter, with revenue and profitability falling compared to the third quarter. Overall, however, 2024 profits were excellent with EBIT (Earnings Before Interest and Tax) doubling to US$4.743bn. Of course, the drivers underlying these results are the problems in the Red Sea and the consequent impact on capacity availability.
The ‘Logistics and Services’ business also did well even through the Red Sea crisis had a less direct impact. Here, for the full year 2024, revenue was up 7% year-on-year to US$14.9m whilst EBIT was 20% year-on-year higher at $538m. It is unclear why this business did so well, however the high rates being paid for freighter aircraft probably was part of it.
The ports business also prospered, with full year 2024 EBIT 35% higher year-on-year at $1.329bn. Maersk said this was due to “stronger storage revenue and higher volumes, as terminals became fully operational following construction closures in 2023”, although the demands made on terminal by the Red Sea crisis probably helped.
In discussing guidance for 2025, Maersk commented that although it expected container volumes to be “around 4%” higher for both the market and Maersk, it admitted that future prospects are “subject to considerable macroeconomic uncertainties impacting container volume growth and freight rates”. It said that its estimates were based on the assumption that “the Red Sea re-opens mid-year for the low end of the guidance and re-opens at year-end for the high-end” whilst adding that the prospects for world trade were also uncertain.
Author: Thomas Cullen
Source: Ti Insight
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