Maersk Reports Pandemic-Fueled Record First Quarter

The world’s largest container shipping line A.P. Moller – Maersk reported an “exceptionally strong” first quarter, with the company benefitting from strong pandemic-fueled demand and significant disruptions in global supply chains. Strong earnings and growth momentum was reported across all its businesses spanning ocean, port services and logistics.

Overall in Q1, EBITDA increased to $4 billion from $1.5 billion year on year and EBIT to $3.1 billion from $552 million compared to same quarter last year, while revenue improved by 30% to $12.4 billion. Underlying profit during the quarter was $2.7 billion, up from $197 million in the first quarter of 2020.

Maersk said the results reflect the high volumes, up 5.7%, significant increases in freight rates of 35% and lower bunker fuel prices, leading to an EBITDA in its Ocean segment of $3.4 billion compared to $1.2 billion in Q1 2020, and an increase in revenue to $ 9.5 billion from $7.2 billion.

“A.P. Moller – Maersk delivered an exceptionally strong performance in Q1 2021 with record profit for the quarter. The high growth and profitability were driven by solid demand across Ocean, Logistics and Terminals. Strong demand led to bottlenecks and a lack of capacity and equipment, which drove up freight rates to record-high levels,” says 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 added.

The results come amid a “persistently difficult environment” driven by the COVID-19 pandemic.

“We have continued to dedicate significant efforts to the safety of our employees and contribute to the societies we operate in, this quarter with a particular emphasis on India,” says Skou.

Skou also announced an new share buy-back program amounting to $5 billion over two years.

“Overall, we can be very satisfied with how the business performed this quarter. High profitability led to a ROIC of 15.7 pct., and our strong free cash flow gives us the opportunity to invest further in the transformation of the business, while accelerating the remaining part of the ongoing share buy-back programme and subsequently launch a new, additional share buy-back programme of approx. USD 5bn over the coming two years,” Skou added.

The overall strong performance has led Maersk to upgrade its full-year 2021 guidance as it now sees the “exceptional market situation” continuing “well into the fourth quarter.” The guidance was updated April 26 as follows:

• Underlying EBITDA in the range of USD 13.0-15.0bn (previously USD 8.5-10.5bn) compared to USD 8.3bn in 2020
• Underlying EBIT in the range of USD 9.0-11.0bn (previously USD 4.3-6.3bn) compared to USD 4.2bn in 2020
• Free cash flow of minimum USD 7.0bn (previously above USD 3.5bn) compared to USD 4.6bn in 2020

“As part of the full-year guidance for 2021, A.P. Moller – Maersk now expects the current exceptional situation, with the demand surge leading to bottlenecks in the supply chain and equipment shortage, to continue well into the fourth quarter of 2021 versus previously expected to continue in Q1 and normalise thereafter. As expected, profitability in Q1 2021 was above Q4 2020.”

Maersk also expects accumulated capital expenditures to be around $7 billion, up from $4.5 to $5.5 billion previously.

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