[211120.EN.SEA] Maersk's Q3 Net Profit Soars 82pc To US$947m Despite Dip In Revenue

DANISH shipping giant, Maersk has posted a net profit of US$947 million for the third quarter, a staggering 82 per cent increase from last year's Q3 net income of $520 million.

Despite a 1.4 per cent year-on-year decrease in group revenue to $9.92 billion, ebitda surged 39 per cent to $2.3 billion, driven by lower fuel costs and higher freight rates from its container liner business. The carrier said it expected an even stronger result in Q4.

Maersk's ocean sector contributed an ebitda of $1.8 billion, up by $511 million on the same period of 2019. Terminals & towage improved slightly, at $328 million, compared with $315 milliion, and its logistics and services unit weighed in with an ebitda of $131 million, versus $91m.

Carryings on Maersk's containerships in the quarter fell by a below-industry par 4.1 per cent, to 3.3 million TEU, dragged down by a 10 per cent decline on its north-south trades.

Revenue was down 3.6 per cent to $7.12 billion, while its average freight rate edged up 4.4 per cent to $955 per TEU, which, combined with a 29 per cent decrease in bunker prices to $290 per tonne, produced a very impressive operating margin of 25.4 per cent, reports The Loadstar, UK.

SeaIntelligence's Lars Jensen said Maersk's below-par volume decline suggested it had lost market share and "appears to have focused on profitability and filling the vessels".

Chief executive Soren Skou said he was proud that against the background of the pandemic, Maersk had delivered better results "even when volumes are down".

He added: "A stronger-than-expected recovery in demand, following the slowdown of Q2 led to the reactivation of all available tonnage as well as significantly higher prices in the short-term market. This, combined with our continued profitability focus, helped us deliver a very strong quarter in Ocean."

He said the improving performance was "accelerating into Q4" and that the final quarter, normally a slack season for carriers, was, "unusually", expected to be better than Q3.

He also explained that the full benefit of skyrocketing short-term freight rates seen on many tradelanes since September would be seen in Q4, thereby prompting Maersk to further upgrade its full-year earnings guidance by $500 million to $8 billion-$8.5 billion.

Maersk's result was achieved, said the company, despite taking a restructuring charge of $105 million in the quarter, which included "the impact from redundancies of approximately 2,000 colleagues".

Mr Skou said Maersk had "no plans" for further liner acquisitions and, moreover, was happy with "below-market organic growth" and to operate with a fleet capacity of around 4 million TEU, despite 2M partner MSC's aggressive growth policy which could see it overtake the Danish line within two years at the top of the liner rankings.

"We are not planning to order any new ships anytime soon," said Mr Skou, "we have all the Triple-E ships we need and any new orders will be for replacement tonnage in the 10,000-15,000 TEU sizes".

Source : HKSG / Photo : DNV GL.