Maersk Q22024 revenue down 2%, net profit drops 44%

Danish carrier Maersk reported a 44 percent decline in net profit at $833 million for the second quarter of 2024 despite a seven percent increase in loaded volume and average loaded freight rate increase of 2.3 percent.

Total revenue was down marginally (two percent) at $12.8 billion compared to $13 billion in Q22023, says an official release.

"Ocean saw strong volume growth and higher freight rates, primarily in Asia exports, reflecting the increased supply chain pressure while the situation in the Red Sea and rerouting south of Cape of Good Hope continued to lead to higher operating costs. Profitability returned to positive territory, and while below the same quarter last year, performance was significantly better compared to Q1 2024 and Q4 2023."

Logistics & services grew by seven percent compared to the year prior, and increased volumes across all products more than offset low rates, the release added. "Profitability improved both sequentially and year on year, positively impacted by increased asset utilisation, good cost control and progress on initiatives to address customer implementation challenges in the ground freight business in North America."

Terminals continued to deliver volume growth, particularly in North America, the update added. "Revenue per move increased significantly due to higher tariffs and higher storage, while cost per move increased slightly. Effective cost management and robust revenue growth supported profitability, leading to one of the highest EBITDA levels ever."

Vincent Clerc, CEO, Maersk says: "“Our results this quarter confirm that performance in all our businesses is trending in the right direction. Market demand has been strong, and as we have all seen, the situation in the Red Sea remains entrenched, which leads to continued pressure on global supply chains. These conditions are now expected to continue for the remainder of the year. We have invested in additional equipment in all our businesses to adapt to the situation and continue supporting our customers through the disruptions.

"As we look ahead, our focus remains on leveraging organic growth while exploring opportunities for value-accretive acquisitions, particularly in Logistics. We will maintain tight cost control and high asset utilisation and further execute on our fleet renewal programme."

(Video Credit: Maersk)

2024 outlook
Maersk had raised its 2024 outlook on August 1 due to continued supply chain disruptions caused by the ongoing situation in the Red Sea/Gulf of Aden and robust container market demand. The company is now expecting an EBIT of $3-5 billion (as against the earlier expectation of $1-3 billion and an unchanged capex of $8-9 billion.