Maersk CEO: moving through this market normalisation, we remain focused on proactively managing costs.
Ocean revenue decreased by USD 5.7bn to USD 9.9bn. Profitability for the quarter was significantly lower compared to Q1 2022, primarily due to lower freight rates and volumes, as demand softened. However, proactive cost containment measures have been successful, and the Ocean contract negotiation season is proceeding in line with expectations.
In Logistics & Services, revenue grew 21% to USD 3.5bn driven by the consolidation of acquisitions. Organically, Q1 was affected by lower volumes caused by inventory corrections, especially with North American and European retailers, which was partially offset by new commercial wins. Additionally, underlying business performance was impacted by lower rates in Air Freight and weaker demand in eCommerce.
In Terminals, the top line was affected by lower volumes and storage income, both a factor of lower demand and the release of port congestion. Revenue in Terminals decreased to USD 876m from USD 1.1bn, but strong cost control contributed to continued solid financial performance in Terminals.
Q1 was marked by continued destocking in Europe and especially North America. While it is difficult to predict the exact timing, Maersk expects volumes to gradually pick up in the second half of the year.
Guidance for 2023
Guidance remains unchanged and is still based on the expectation that inventory correction will be complete by the end of H1, leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%. Ocean expects to grow in line with market.
In Q1 2023, A.P. Moller – Maersk recognised USD 374m of the previously communicated USD 450m impairment and restructuring charge for the A.P. Moller – Maersk brands.
Guidance USDbn EBITDA Underlying 8.0-11.0 EBIT Underlying 2.0-5.0 Free cash flow at least 2.0 CAPEX guidance, maintained 2022-2023 9.0-10.0 CAPEX guidance 2023-2024 10.0-11.0
Cash distribution to shareholders
A total distribution of cash to shareholders of USD 10.1bn took place during Q1 2023 through dividends paid of USD 9.4bn and share buy-backs of USD 718m.
USD million 2023 Q1 2022 Q1 Ocean 9,873 15,570 Logistics & Services 3,471 2,879 Terminals 876
Towage & Maritime Services
Unallocated activities, eliminations, etc. -615 -843 A.P. Moller – Maersk consolidated 14,207 19,292