Maersk Q1 earnings down 68% on lower volumes
Full-year guidance remains unchanged with Q1 expected to be the strongest quarter of the year
Maersk reported a 26 percent decline in revenue to $14.2 billion for the first quarter of 2023 compared to $19.3 billion in Q12022 on continued destocking and easing of congestion.
"EBITDA decreased to $4 billion from $9.1 billion, and EBIT to $2.3 billion from $7.3 billion," says an official release.
“We delivered a solid financial performance in a challenging market with lower demand caused by a continued destocking," says Vincent Clerc, CEO, Maersk. "Visibility remains low for the remainder of the year, and moving through this market normalisation, we remain focused on proactively managing costs. As we adjust to a radically changed business environment, we continue to support our customers in addressing their supply chain challenges. We are pleased to note that customers continue to value the integrated logistics solutions and close partnership we provide."
Ocean revenue declined 36 percent to $9.9 billion. "Profitability for the quarter was significantly lower compared to Q1 2022, primarily due to lower freight rates and volumes as demand softened. However, proactive cost containment measures have been successful, and the ocean contract negotiation season is proceeding in line with expectations."
In logistics & services, revenue increased 21% to $3.5 billion, driven by the consolidation of acquisitions. "Organically, Q1 was affected by lower volumes caused by inventory corrections, especially with North American and European retailers, which was partially offset by new commercial wins. Additionally, underlying business performance was impacted by lower rates in air freight and weaker demand in e-commerce."
Revenue in terminals decreased to $876 million from $1.1 billion but strong cost control contributed to continued solid financial performance in terminals, the release added.
The full-year guidance remains unchanged with Q1 expected to be the strongest quarter of the year. While EBITDA is likely to be $8-11 billion, EBIT is likely to be $2-5 billion.
"In Q1 2023, Maersk recognised $374 million of the previously communicated $450 million impairment and restructuring charge for the Maersk brands."
The company returned $10.1 billion to shareholders via $9.4 billion dividends and $718 million buybacks, the release said.
(Video Credit: Maersk)