Maersk Triples Quarterly Income Despite Lower Container Volumes
Shipping group A.P. Moller-Maersk said on Tuesday record-high freight rates boosted quarterly earnings despite lower container volumes due to congestion at ports.
The coronavirus pandemic has prompted a shortage of container ships and logjams at ports at a time of high consumer spending, pushing the cost of transporting freight to record levels.
Maersk, which handles one in five containers shipped worldwide, said its main Ocean business is now expected to grow below that of global container demand, which is seen at 7-9% in 2021 versus previous guidance of 6-8%.
The Danish company said container volumes were down 4% in the quarter compared to the same period in 2019 and slightly below last year, despite adding more ocean shipping capacity.
"Decreasing volumes were driven by exports out of Asia due to shortage of equipment and congestions," Maersk said in a statement.
Its shares, which are up some 40% year-to-date, rose 1% in early trading.
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Maersk also announced on Tuesday it will buy freight-forwarder Senator International, whose largest business is within air freight, along with two Boeing aircraft for an enterprise value of around $644 million.
Maersk, which relies on ocean shipping for two-thirds of its revenue, aims to expand its services to include more air and land-based freight, hoping to deliver door-to-door logistical solutions to clients like Walmart and Puma.
Strong financial results during the pandemic have accelerated the company's ongoing transformation from a container shipping company to an integrated logistics company.
It said final third-quarter earnings before interest, tax, depreciation and amortization (EBITDA) tripled to $6.9 billion compared with a preliminary figure of close to $7 billion issued on Sept. 16, when the company also lifted its 2021 forecasts.
It also said it would extend its existing share buy-back programme by an additional $5 billion over the years 2024 and 2025.
(Reporting by Stine Jacobsen, Editing by Louise Heavens, Kirsten Donovan and Emelia Sithole-Matarise)