Yemen Monitor/Newsroom:
AP Moller – Maersk has announced a 65% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) for the full fiscal year 2024, reaching $6.5 billion compared to $3.94 billion in 2023. The company reported annual revenue of $55.48 billion for 2024.
The improved financial results, which are the third-best ever for Maersk, were driven by increased demand for containers and higher shipping prices due to the security situation in the Red Sea. All major container lines have rerouted their Asia-Europe/Mediterranean and Asia-US East Coast services via the Cape of Good Hope, adding 10-14 days to transit times in each direction.
EBITDA reported by Maersk’s ocean shipping, or container shipping, business more than doubled to $4.47 billion last year, compared to $2.23 billion in 2023. The APM Terminals business also saw a significant improvement in EBITDA from $980 million in 2023 to $1.33 billion last year. The logistics business reported EBITDA of $538 million in 2024, up from $446 million.
“Higher shipping rates due to the situation in the Red Sea, coupled with our ability to capitalize on higher-than-expected demand, strong operational execution and cost discipline, drove us to repeatedly raise expectations throughout the year, ultimately delivering results significantly above initial guidance,” said Vincent Clerc, CEO of Maersk, and Robert Maersk Uggla, Chairman of the Board of Maersk, in their annual report statement.
The company’s ocean business has recently seen the start of its new alliance with Hapag-Lloyd, the Gemini Alliance. The new alliance has focused on a network of hubs and spokes to improve efficiency and reliability.
“The network is anchored in our own hub terminals, supported by investments to ensure fast and efficient reloading. Once fully implemented, we will reduce the number of port calls per loop by around 40% and shorten the loops by around 15% in terms of miles sailed, ultimately leading to improved asset turnover,” Maersk’s chairman and CEO added.
Maersk has focused heavily on logistics in recent years and 2024 saw the completion of the integration of LF Logistics with approximately 10,000 employees and 155 warehouses globally. Despite investment in the service and logistics business, it still contributes less than 10% of Maersk’s $6.5 billion EBITDA in 2024. While revenue grew 7% to $14.92 billion last year, this was 26.8% of the group’s total revenue of $55.48 billion.
Maersk said its financial guidance is based on global container volume growth of 4% and the Danish company’s growth in line with the market. The reopening of the Red Sea is set to have a significant impact on Maersk’s profitability in 2025.
The company expects to achieve EBITDA of $0.0 billion, or break-even, if the Red Sea route reopens in the middle of the year, and $3.0 billion if ships continue to be rerouted via the Cape of Good Hope until the end of 2025.
“Maersk’s outlook for 2025 is subject to considerable macroeconomic uncertainty impacting container volume growth and freight rates,” the company said.
