-
Second-quarter revenue surges 52% to US$21.7 billion while net profit more than doubles to US$8.6 billion in Q2 and US$15.4 billion for H1 2022
-
Ocean revenue grows to US$17.4 billion and EBIT climbs to US$8.5 billion in Q2 with higher freight rates offsetting decline in volumes
-
Full-year 2022 guidance upgraded with EBITDA of US$37 billion, underlying EBIT of US$31 billion and a free cash flow above US$24 billion
A.P. Moller-Maersk delivered record second-quarter results with revenue surging 52% year-on-year and profits more than doubling amid exceptional market conditions and sustained momentum from its strategic transformation focused on integrated logistics.
Maersk said based on the strong first-half 2022 performance, it has upgraded its full-year guidance and increased its current share buyback program.
“We delivered an exceptionally strong result for the second quarter and consequently recorded the 15th quarter in a row with year-on-year earnings improvements,” Maersk chief executive Soren Skou said in a statement.
“We are pleased with our performance across the business in first half of 2022, which clearly demonstrates the progress and great work by the entire Maersk team, transforming the company towards becoming a global, integrated logistics company.”
In the second quarter, revenue grew to US$21.7 billion, earnings before interest, tax and debt amortization (EBITDA) increased to $10.3 billion and EBIT to $9.0 billion. Free cash flow rose to $6.8 billion.
The Q2 net result came in at $8.6 billion and $15.4 billion for the first half of the year. Return on invested capital (ROIC) was at 62.5% for the past 12 months.
“The result was driven by strong contract rates in ocean, rapid profitable growth in logistics and continued solid performance in terminals,” said Skou. Ocean volumes were softer as congestion continued and the Ukraine war weighed on consumer confidence.
“However, in logistics we grew volumes above the market as our ocean customers continue to buy into our value proposition, resulting in organic revenue growth of 36%, notching up the 6th quarter in a row of more than 30% organic growth.”
Maersk’s ocean revenue grew to $17.4 billion and EBIT increased to $8.5 billion in the second quarter. The higher freight rates were partly offset by 7.4% lower volumes and higher fuel, handling, and network costs.
Although spot rates had fallen off their peak earlier this year, Maersk continued to sign contracts at rates above previous year’s levels on firm demand and persistent global supply chain clogging.
During Q2, Maersk maintained its strong momentum in bringing integrated logistics solutions to customers. For the quarter, logistics revenue rose 61% to $3.5 billion and EBIT to $234 million on higher volumes from new customers and increased spending from existing customers.
Maersk continued to invest in its logistics portfolio and capabilities. In Q2, it completed the buyout of logistics specialist Pilot Freight Services and global air freight expert Senator International. Maersk boosted its air freight offering by launching Maersk Air Cargo.
In Terminals, revenue grew to $1.1 billion and EBIT increased to $316m, driven by strong US import demand and above-market growth in Asia as well as higher storage income that was partly offset by higher costs.
Global demand for logistics services moderated across global supply chains in Q2. Freight rates eased but remained high historically as supply chain congestion worsened globally. Container volume fell 2.3% while global air cargo volumes (CTK) fell 9.4% in April/May.
Geopolitical uncertainty and higher inflation due to costlier energy continued to weigh on consumer sentiment and growth expectations. Given this background, global container demand in 2022 is now expected to be at the lower end of the -1% to +1% forecast range.
Maersk said it expects underlying EBITDA of $37 billion, underlying EBIT of $31 billion and a free cash flow above $24 billion for the full year, based on the strong first-half performance and ocean business gradually normalizing in the fourth quarter.
As a result, the company said it will increase its share buyback by $500 million annually from $2.5 billion to $3 billion for 2022-2025.
