Maersk reports profits of $30m in 2022 and expects a 85-95% slump in 2023 Seafarers News

Maersk reports $30 billion in net income but expects it to plummet 85-95% through 2023. The Maersk Group reported 2022 operating income (EBIT) of $30.8 billion, beating last year’s sales by 57%, but the group warned this year’s financial results could be a fraction of recent earnings, reports Alphaliner.

The Danish company now forecasts EBIT of between $2 billion and $5 billion by 2023, based on “very poor profitability” for its Ocean (container shipping) division in the second half of the year. Investment analysts have even raised the possibility of quarterly losses in the pool as contract rates trade back in line with spot rates and costs may increase. However, the group said it expects bunker prices to fall in the second half of the year, Alphaliner replies.

Fourth-quarter earnings fall year-on-year

According to Alphaliner, Maersk’s Ocean division at segment level for 2022 achieved EBIT of USD 29.1 billion (2021: USD 17.9 billion) on sales of USD 64.3 billion (2021: USD 48.2 billion).
Fourth-quarter profit was lower than a year ago ($4.8 billion) as average rates fell to $1,934 per TEU and container throughput fell to 5.6 Mteu, the lowest quarterly moves since 2017.

In fact, Maersk confirmed that lower volumes, not lower interest rates, drove the earnings decline over the last three months of the year. Maersk said it expected interest rates to fall but not the sharp drop in volumes, which fell 20% overall in the U.S. and Europe on inventory corrections.

Wide range of EBIT for 2023

Alphaliner also reports that the shipping company expects container volume growth in the range of -2.5% to 0.5% in 2023, with demand expected to stabilize in the second half of the year. However, supply-side factors will pose a risk to container activity, resulting in the wide range of EBIT guidance.

He pointed out that other companies in the group would successively increase their contribution to earnings from the second half of the year.

It concludes by stating that Maersk is now strengthening its ‘integrator’ strategy, in which it combines its various activities under a ‘by Maersk’ approach, with cargo managed, fulfilled and transported by Maersk. He said he will initially focus on creating scalability, increasing productivity and bringing new products to market.
Meanwhile, in historical context, the lower end of the group’s EBIT guidance for 2023 remains higher than the group’s operating profit in 2016-2019 but below the profit in 2013-2015.

Source: Alphaliner

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