Higher ocean freight rates and container volumes helped drive a 41% gain in ocean shipping revenue for A.P. Moller-Maersk in the third quarter.
The Denmark-based parent (CPH: MAERSK-B.CO) of Maersk shipping line and APM Terminals said the strong quarter along with a robust container market and continued disruptions to Red Sea shipping led it to upgrade its full-year 2024 guidance from Oct. 21 of underlying earnings before interest and taxes to $5.2 billion-$5.7 billion from $3 billion-$5 billion.
“This quarter, we once again supported our customers through times of high volatility and low visibility,” said Chief Executive Vincent Clerc in an earnings release. “We reaffirmed our commitment to profitable growth and operational progress, driving results across all business areas through continued rigorous focus on cost discipline, productivity gains, and efficient asset utilization.”
Clerc said the Logistics & Services segment showed steady margin improvements and new customer wins while Terminals drove additional improvements.
“Our Ocean team responded to the recurring network disruptions with high agility by leveraging our hub terminals and investing in capacity and equipment to mitigate the supply chain impact on our customers while optimizing unit costs.”
Rerouting south of Africa’s Cape of Good Hope due to Houthi attacks on shipping in the Red Sea impacted fuel consumption and higher operating costs. The company said these were largely offset by efficient operations, resulting in an EBIT increase of $2.9 billion and margin of 25.5% from the year-ago quarter.
Logistics & Services delivered a strong third quarter with revenue up 11% year on year and 7.2% from the second quarter, on increased volumes across most products. Profitability continued its recovery at an EBIT of $200 million, up $64 million y/y, primarily on profitable growth in Lead Logistics and Air, for an EBIT margin of 5.1%.
Terminals revenue grew, particularly in North America. Revenue per move reached all-time highs during the quarter driven by higher volumes, improved tariffs and product mix. The segment achieved its best earnings before interest, taxes, depreciation and amortization since Q1 2022 of $424 million and finished the quarter with a return on invested capital, last 12 months, of 13%.
Maersk now expects the global container market for the full year to grow around 6% (previously 4%-6%).
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