A.P. Moller – Maersk presents a record Q3 and continues to deploy its integrator strategy to alleviate supply chain bottlenecks

Photo: Maersk

Copenhagen, A.P. Moller – Maersk delivered record earnings in Q3, 2021. Revenue grew 68 pct. to USD 16.6bn in Q3, EBIT was up almost five times to USD 5.9bn and EBITDA tripled to USD 6.9bn. Return on invested capital (ROIC) increased to 34.5 pct. for the past 12 months.

In the ongoing exceptional market situation, with high demand in the US and global disruptions to the supply chains, we continued to increase capacity and expand our offerings to keep cargo moving for our customers. Our integrator strategy is key to supporting our customers’ end to end logistics needs by designing a more stable Ocean business, strongly growing our logistics offering and relying on automated and efficient terminals.

Søren Skou
CEO of A.P. Moller – Maersk

In Ocean, results in Q3 were driven by high freight rates in an exceptional market situation with revenue almost doubling to USD 13.1bn from USD 7.1bn, EBITDA increased by USD 4.4bn to USD 6.3bn and EBIT improved by USD 4.4bn to USD 5.3bn. To further guarantee reliable transportation, the share of long-term contracts was further increased, now accounting for 64 pct. of long-haul volumes compared to 50 pct. a year ago.

Logistics & Services continued the positive momentum with revenue increasing 38 pct. to USD 2.6bn whereof 33 pct. was organic. The growth was driven by strong activity increase across all products and strong commercial synergies to Top 200 Ocean customers. EBIT increased to USD 194m from USD 100m in same quarter last year and with an EBIT margin of 7.5 pct. well ahead of our mid-term target of above 6 pct.

Gateway Terminals also had a strong Q3 with revenue growing to USD 1bn in Q3 from USD 816m last year as volumes increased by 9.6 pct. mainly coming from North America, Latin America and Asia as opening times were expanded and capacity utilization increased. Together with underlying efficiency improvements Terminals achieved a ROIC of 10 pct.

As a natural next step in expanding our multi logistics offering we today announce the acquisition of SENATOR INTERNATIONAL and the ordering of additional aircraft, building on our existing Air Freight capabilities and adding even more flexibility to our customers’ supply chains. Given the significant progress of our transformation into a logistics integrator and the continued commitment to shareholder returns, the Board of Directors has decided to extend the current share buy-back programme by an additional USD 5bn over the years 2024 and 2025.

Søren Skou
CEO of A.P. Moller – Maersk

A.P. Moller – Maersk reiterates the guidance for the full-year as announced on 16 September 2021 with an underlying EBITDA in the range of USD 22 – 23bn, an underlying EBIT in the range of USD 18 – 19bn and a free cash flow of minimum USD 14.5bn.

Ocean is now expected to grow below the global container demand, which is now expected to grow 7-9 pct. in 2021 (previously 6-8 pct. in 2021), subject to high uncertainties related to the current congestion and network disruption.

For 2021-2022, the expectation for the accumulated CAPEX remains unchanged at around USD 7bn.

The current trading conditions are still subject to a higher-than-normal uncertainty due to the temporary nature of current demand patterns, disruptions in the supply chains. However, current conditions are expected to continue at least into the first quarter of 2022, resulting in an EBITDA for Q1 2022 in line with Q4 2021.

Highlights and sensitivity guidance

Revenue

USD million20212020
Ocean13,0937,118
Logistics & Services2,6011,891
Terminals & Towage1,205976
Manufacturing & Others305324
Unallocated activities, eliminations, etc.-592-392
A.P. Moller – Maersk consolidated16,6129,917

EBITDA

USD million20212020
Ocean6,2511,805
Logistics & Services267131
Terminals & Towage433328
Manufacturing & Others2748
Unallocated activities, eliminations, etc.-35-15
A.P. Moller – Maersk consolidated6,9432,297

EBIT

USD million20212020
Ocean5,337968
Logistics & Services194100
Terminals & Towage352236
Manufacturing & Others720
Unallocated activities, eliminations, etc.-31-35
A.P. Moller – Maersk consolidated5,8591,289

CAPEX

USD million20212020
Ocean454143
Logistics & Services5727
Terminals & Towage86104
Manufacturing & Others155
Unallocated activities, eliminations, etc.-21
A.P. Moller – Maersk consolidated610280

Sensitivity guidance

Financial performance for A.P. Moller – Maersk for 2021 depends on several factors and is subject to uncertainties related to COVID-19, bunker fuel prices and freight rates, given the uncertain macroeconomic conditions.

All else being equal, the sensitivities for 2021 for four key assumptions are listed in the table below:

FactorsChangeEffect on EBIT (midpoint of guidance) Rest of year
Container freight rate+/- 100 USD/FFE+/- USD 0.3bn
Container freight volume+/- 100,000 FFE+/- USD 0.3bn
Bunker price (net of expected BAF coverage)+/- 100 USD/tonne+/- USD 0.1bn
Foreign exchange rate (net of hedges)+/- 10% change in USD+/- USD 0.0bn

Source: A.P. Moller – Maersk

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