Maersk said its financial results for the third quarter of the year were in line with expectations in a "difficult market environment" with rates well off their last year peak and tested by the increase of capacity in Ocean.
The Danish shipping giant reported revenue of US$12.1 billion in 2023 Q3, falling about 47% year-over-year, with an EBIT margin at 4.4% impacted by lower freight rates and decreased box volumes.
Vincent Clerc, CEO of Maersk, commented, "Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base. Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling."
The Ocean sector of Maersk reported a 9% increase in container volumes since the previous quarter. However, EBIT was negative at US$27 million, while in the same period last year, Maersk reported an astonishing US$8.7 billion. Similarly, Maersk Ocean sector reported US$1.1 billion EBITDA in Q3, compared to US$9.9 billion last year and US$7.9 billion revenue from US$18 billion in 2022 Q3.
This tremendous downfall in the financial figures was mainly driven by "significant pressure on rates, in particular on Asia to Europe, North America and Latin America trades", according to Maersk.
The other two main sectors of the company, Logistics & Services and Terminals, have also seen decreases in revenue and earnings, but to a significantly lesser extent.
Regarding the whole of 2023, Maersk now sees global container volume decline in the range of 0.5% to 2%.
In addition, the Copenhagen-based carrier said it maintains its full-year 2023 guidance ranges but now anticipates results closer to the lower end of the previously communicated ranges of underlying EBITDA of US$9.5-11 billion and underlying EBIT of US$3.5-5 billion.
The company's guidance for free cash flow (FCF) of at least US$3 billion remains also unchanged. CAPEX for 2022-2023 is now estimated to be about US$8 billion and US$8-9 billion for 2023-2024.
"Given the challenging times ahead, we accelerated several cost and cash containment measures to safeguard our financial performance. While continuously streamlining our organisation and operations, we remain dedicated to our strategy of fulfilling our customers’ diversified supply chain needs while pursuing growth opportunities across our Terminals business and Logistics & Services," said Clerc.
