Maersk Q32024 revenue up 30% on higher freight rates

Maersk reported an underlying profit of $3.10 billion for the third quarter of 2024, reflecting the positive impact from significantly higher freight rates, improved volumes across all segments and higher revenue per move in Terminals.

Revenue increased 30 percent to $15.8 billion and operating profit (EBIT) zoomed to $3.3 billion from $538 million in the same period last year, says an official release.

Vincent Clerc, CEO, Maersk says: “This quarter, we once again supported our customers through times of high volatility and low visibility. 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 utilisation. In Logistics & Services, our focused effort led to steady margin improvements and growth through new customer wins. In Terminals, we drove additional improvements, building on already high performance. 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 optimising unit costs."

(Video Credit: Maersk)

Ocean profitability was a result of freight rates having increased by 54 percent ($3,236/FFE) as well as positive volume growth of 0.3 percent (3.2 million FFE), culminating in a 41 percent increase in revenue ($11.1 billion). "The rerouting south of Cape of Good Hope remained a significant factor, impacting bunker consumption and operating costs. Despite these cost pressures, both EBITDA and EBIT increased by $2.9 billion, with an EBIT margin reaching 25.5 percent.

"Logistics & Services delivered a strong Q3 with revenue growth year-over-year and sequentially of 11 percent and 7.2 percent, respectively, due to increased volumes across most product families. EBIT continued its recovery landing at $200 million, primarily from profitable growth in Lead Logistics and Air, resulting in an EBIT margin of 5.1 percent.

"Terminals continued to deliver strong topline growth, particularly in North America where volume remained strong. Both volume and revenue per move reached all-time highs during the quarter. Accordingly, Terminals achieved its best EBITDA since Q1 2022 of $424 million, driven by strong volumes and localised increased storage revenue, in particular in North America, finishing the quarter with a ROIC (LTM) of 13 percent."

Air freight outlook
Global air freight forwarding demand was robust in Q2 at eight percent year-over-year, according to Maersk. "Partial data indicate that momentum remained strong in Q3. Booming exports out of China and Southeast Asia explain close to half of the growth. Even though the surge in direct-to-consumer e-commerce continues to play a key role, all verticals support growth. Rates remained stable with the TAC Index at $2.14 per kilo in Q3, pointing to a balance between global supply and demand. However, challenges are emerging on the supply side with key manufacturers struggling to meet delivery dates amid strikes and shortages of materials."

Financial review 9M2024
For the first nine months of 2024, total revenue increased by four percent to $40.9 billion and underlying profit dropped to $3.9 billion from $4.4 billion in the same period last year "adjusted for net gains of $212 million, mainly driven by vessel and container sales in Ocean."

2024 outlook
Maersk is expecting an underlying EBIT of $5.2-5.7 billion for the full year 2024 on the back of strong Q3 results combined with strong container market demand and the continuation of the Red Sea/Gulf of Aden situation. Maersk now expects global container market growth for the full year to be around six percent (previously 4-6 percent).