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Maersk sees near six-fold profit increase for 2020

Danish shipping giant AP Moller-Maersk on Wednesday posted a near six-fold increase in net profit for 2020, as demand during the coronavirus pandemic rebounded strongly from an initial slump, sending freight rates soaring.

Maersk sees near six-fold profit increase for 2020
Photo: Sun Yilei/Reuters/Ritzau Scanpix

A shortage of available containers in Asia during the pandemic has led to a surge in freight rates.

For the full-year 2020, Maersk recorded a net profit of $2.9 billion (2.4 billion euros) in its ongoing operations.

Revenue grew 2.2 percent to $39.7 billion, slightly more than analysts' estimates which ranged between $39.56 and $39.58 billion.

Gross operating profit, EBITDA, increased by 44 percent to $8.23 billion, thanks to reduced costs and optimisation of the supply chain.

The transport sector has recovered faster than other parts of the world economy as restrictions related to the Covid-19 pandemic have weighed more heavily on the consumption of services than on goods.

At the end of 2020, global container volumes were higher than at the end of 2019, the Danish freight behemoth noted.

“We are today a profitable, growing logistics company with a broad offering of ocean and air transportation,” chief executive Soren Skou said.

Since the sale of its oil division to France's Total in 2017, Maersk has undertaken a major restructuring to refocus on transport and logistics.

Maersk aims to become carbon neutral by 2050 and reported a drop of over 40 percent in emissions for the year as a whole.

The company operates in 130 countries and employs some 80,000 people worldwide.

 

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BUSINESS

Maersk profits up as global supply chain disrupted

Danish shipping giant, AP Møller-Maersk, said Tuesday that profits were up sixfold in the third quarter as the coronavirus pandemic and global supply chain problems caused container prices to soar. 

Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021.
Maersk headquarters in Copenhagen. The Danish shipping company posted hefty profits in the third quarter of 2021. Photo: Niels Christian Vilmann/Ritzau Scanpix

“Maersk delivered record earnings” in the third quarter, chief executive Soren Skou said.

“In the ongoing exceptional market situation, with high demand in the US and global disruptions to the supply chains, we continued to increase capacity and expand our offerings to keep cargo moving for our customers.” 

Maersk said that its bottom-line net profit amounted to $5.438 billion in the period from July to September, compared with $947 million a year earlier.

Underlying, or operating, profit increased nearly fivefold to $5.859 billion and revenues jumped by 67 percent to $16.612 billion.

“Results in Q3 were driven by high freight rates in an exceptional market situation,” the group said.

Looking ahead, Maersk said it is sticking to its full year forecast for operating profit of 18-19 billion dollars. 

However, the ocean shipping division “is now expected to grow below” projected global container demand of between seven and nine percent this year, “subject to high uncertainties related to the current congestion and network disruption,” Maersk said.

“The current trading conditions are still subject to a higher-than-normal uncertainty due to the temporary nature of current demand patterns, disruptions in the supply chains,” it cautioned.

READ ALSO: Danish shipping giant calls for global carbon tax for shipping

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