News / 'Robust Q2', says Maersk, but battens down the hatches for second half

Photo: VesselFinder

Maersk enjoyed a “robust” second quarter, boosted by lower unit costs, but the shipping and logistics group is now sailing in, at best, breakeven waters.

Indeed, notwithstanding raising the lower end of its full-year guidance from an ebit of $2bn to $3.5bn and having already achieved an ebit of $3.9bn after six months, the outlook is for a run of potentially negative quarters.

“The Q2 result contributed to a strong first half of the year, where we responded to sharp changes in market conditions prompted by destocking and subdued growth environment following the pandemic-fuelled years,” said Maersk CEO Vincent Clerc.

“As we enter the second half, we face the challenge of reduced volume growth expectations, combined with expected new vessel delivery and higher capacity in the market. So far the market has absorbed the capacity with better network planning and slow-steaming, yet we are on the lookout for supply side risks,” said Mr Clerc.

“We have seen quite a lot of discipline so far, but whether that is going to continue we will have to see in the course of the next couple of years,” he added.

Turnover for Q2 was $13bn, compared with $27.7bn last year and down from Q1’s $14bn, for an ebit of $1.6bn and a net profit of $1.5bn, versus $8.6bn in Q2 22.

Ocean contributed $8.7bn in revenue during the quarter, compared with $17.4bn the previous year, and carryings contracted by a below-industry-par 6.1%, to 5.8m teu, bringing an average rate of $1,222 per teu – 51% below Q2 22.

Mr Clerc made it clear during the earnings call that Maersk was not overly concerned about conceding market share to competitors. He said: “I tend to weigh margin higher than market share,” and added that the carrier’s top 200 contracted customers were prepared to pay a premium to guarantee their supply chains.

“If you are one of those top 200 customers and you book with Maersk, you will always get space; if you are booking on spot, you may or may not get space,” he explained.

Meanwhile, Maersk’s aspirations for growing its logistics and services sector, fuelled by a number of acquisitions, appears to be stalling. Mr Clerc conceded that there had been “mis-steps” and there was a need to “step-up our game”.

Q2 operating profit for logistics & services came in at a disappointing $115m, compared with $234m in Q2 22, despite significant inorganic growth from the purchases.

And of concern, it said, was 19% organic negative revenue growth, as Maersk’s top 200 customers experienced volume declines.

In Maersk’s terminal sector, ebit for the quarter declined to $269m, from $316m previously, as volumes handled across its terminals fell 6.5%, to 3,052,000 teu, and storage revenue, a by-product of congestion, was substantially reduced.