Danish shipping giant AP Moller Maersk has clocked in record revenue in Q1 and growth across Ocean, Logistics and Terminals business verticals. The record numbers are a result of higher freight rates, as well as contracts being secured at higher levels. However, the Maersk EBIT (earnings before interest and tax) did take hit of USD 718 million in light of the ongoing Russia Ukraine war – USD 627 million of which was lost due to impairment loss and the remaining due to higher operational costs.
In Q1 we delivered the best earnings quarter ever in A.P. Moller – Maersk with growth across Ocean, Logistics and Terminals. While global supply chains remain under significant pressure, we continue to demonstrate superior ability to help customers overcome logistic challenges. In Logistics, we enjoyed strong demand for products and solutions across our portfolio leading to the 5th quarter in a row with organic growth of more than 30%, while Terminals presented its best quarter ever.”Soren Skou, CEO, AP Moller Maersk
Ocean revenue: 46% increase to USD 15.6 billion during Q1. Revenue for the full year is expected to continue to be strong, with an expected addition of USD 10 billion as a result of increase in freight rates on long-term contract portfolios in 2022. This will more than offset the significant increase in costs, which were up 21% in the first quarter given higher fuel costs and inflationary pressure on network and container handling costs.
Logistics revenue: 41% growth to USD 2.9 billion compared to Q1 2021, as both existing and new customers continue to buy into the full value proposition of integrated solutions. At the same time Maersk continues to invest in acquisitions that add capabilities and strengthen their portfolio with Pilot Freight Services.
Terminals revenue: From just under a billion in Q1 2021, revenue increase to USD 1.1 billion and the return on invested capital (ROIC) ended on a record 12.5% before impairment in GPI of USD 485 million, following the exit of the Russian market. The process around the sale of GPI is ongoing. Results in Terminals are driven by higher storage income in NAM, improvement in revenue per move and a volume growth in the overall contracting market.
Currently, Maersk has paused all vessel operations in Russia as well as services in Belarus, and plans to lay off its locations in the Far East Russia. Moscow and St. Petersburg locations will also be shut down by the end of the year and the Belarus location will remain shut through the summer.