Alert in the near term

The Q3 23 was broadly in line with expectation. EBITDA dropped to $1.9bn o/w $1.1bn in Ocean due to lower average freight rates (-58% yoy and -14% sequentially). Earnings were disappointing in Logistics & Services and resilient in Terminals. The Group did give some negative indications. The 2023 guidance is now at the low-end of the range (EBITDA of $9.5bn, EBIT of $3.5bn). Considering the risk of more overcapacity, the restructuring was stepped up, capex was revised downwards and the share buyb

No sign of a volume rebound in H2 23

The container shipping and logistics market was impacted by the reduction of inventory in Q2 23. AP Moller-Maersk posted an honourable performance with EBITDA of $2,905m (-72%) or 22.4% of revenue. In Ocean, cost management mitigated the impact of lower volume (-6%) and average freight rates (-51%). The Terminals business delivered satisfactory results while the Logistics & Services division was disappointing on the revenue trend and EBIT. There is no sign of a volume rebound in H2 23.

No surprise about the drop in earnings

There were no suprises in Q1 23. Lower freight rates and volume pushed down group EBITDA to $3,969m (-56%), of which $3,352m in Ocean. The Ocean division benefited from a positive effect of previous contracts at high rates which will be reduced in Q2 23 and disappear in H2 23. The reduction of inventories at retailers in North America and Europe impacted volume in Logistics & Services and Terminals. 2023 guidance is unchanged.

Back to normalised market conditions

Q4 22 EBITDA was in line with expectation with a decrease to $6,540m (-18%). In Ocean, volume dropped by 14% due to lower consumption and the reduction of inventory at retailers, and average freight rates declined by 3.5% yoy, turning down sequentially by 23% (vs +1.3% in Q3 22 vs Q2 22). Maersk had strong free cash flow of $27.1bn so that the proposed dividend is up 72% to DKK4,300/share. 2023 guidance includes EBITDA in the range $8.0-11.0bn.

2M alliance discontinued: major event in container shipping

The announcement of the discontinuation of the 2M alliance (MSC, Maersk) on January 25 was a major event in the container shipping market which has long been organized around three alliances. It is negative news in our view. Shipping alliances enable capacity discipline, a better utilisation rate by pooling the fleet of larger vessels and cost optimization of the network. There are now unanswered questions as to the development of the market in the future.

Clear environmental roadmap

At its ESG Day, AP Moller-Maersk gave a detailed update on its commitments for 2030 in order to achieve net zero CO2 emissions in 2040. In Ocean, which accounts for a large portion of CO2 emissions, the group chooses green methanol as the first green fuel and has been very active in the signing of partnerships to secure supplies. The group anticipates incremental operating costs of $300-400m by 2025 and $1.5bn incremental capex in 2022-25 which is already included in capex guidance.

Record Q3 22 and start of the normalization in Ocean

Q3 22 was a record quarter and the second consecutive quarter with an EBITDA above $10.0bn. EBITDA reached $10,862m (+56%) corresponding to 47.7% of revenue (+5.9pts). Ocean was the main contributor with an EBITDA of $9,924m thanks to the strong increase in average freight rates (+42% yoy). The increase in freight rates started to stabilize sequentially in Q3 22. The 2022 guidance was unchanged and a decrease in earnings in Ocean is anticipated in the coming quarters.

Gradual normalization awaited in Q4 22

The congestion in the global supply chain continued in Q2 22 and contributed to maintained high freight rates. The Group EBITDA doubled to $10.3bn and Ocean was a major contributor with EBITDA of $9.6bn, 55% of revenue (+15.4pts yoy). Average freight rates surged by +64%, more than offsetting lower volume (-7.4%) and higher operating costs. In H1 22, the Group’s ROIC was exceptional (62.5%). The upgraded 2022 EBITDA guidance ($37bn vs $30bn previously) includes a gradual normalization in Q4 22.

Q3 21 in line with expectation, perspective of a strong Q1 22

In Q3 21, group revenue and EBITDA surged by respectively +68% and +202% due to the continuing exceptional market conditions in the container shipping market. Ocean was largely the main contributor, driven by high freight rates (+87% to $3,561/FFE on average). In Logistics & Services, strong revenue growth (+33% organically) was driven by volume, essentially thanks to the commercial synergies and contract wins. 2021 guidance is unchanged and includes an EBITDA of $22-23bn.

Exceptional market environment, exceptional EBITDA

The group released an extraordinary Q1 21 as pre-announced on 27 April 2021. Revenue increased by 30% and EBITDA jumped to $4,039m (+166%). Ocean was a substantial contributor with revenue growth of 31% and EBITDA of $3,444m (+193%). Strong demand led to extraordinary capacity constraints and bottlenecks in equipment and congestion in ports which had a positive impact of €2.2bn in EBITDA. The raising of 2021 guidance is based on continuing exceptional market conditions and long-term contract ach

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