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A.P. Moller – Maersk reports 58% revenue growth in Q2 2021

A.P. Moller – Maersk has continued to deliver strong growth and profitability, with record-breaking performance marking the 12th quarter of successive year-on-year earnings progress in the second quarter of 2021.

Revenue grew 58% to USD14.2bn in Q2 and EBIT increased almost five times to USD4.1bn. The net result came in at USD3.7bn in the second quarter, bringing the net result for the first half of 2021 to USD6.5bn. Return on invested capital (ROIC) is now at 23.7%. for the past 12 months.

Søren Skou, CEO of A.P. Moller – Maersk, said: “The strong results benefited both from the exceptional circumstances in Ocean, where congestion and bottlenecks continued to drive up rates, and from solid progress in executing on our strategic transformation where we kept a firm focus on our customers need for integrated solutions across their supply chains.

“I am pleased with the strategic progress we have made and the high value generation. We continue to build a higher quality Ocean business with more long-term contracts, a rapidly growing logistics business, and a value creating terminals business. Our exceptional earnings and high cash flow enable us to further accelerate our transformation, invest in growing our activities, also through acquisitions and at the same time return cash to shareholders.”

He added: “To that effect we also announced today the acquisitions of Visible SCM and B2C Europe which complements our existing supply chain offering and addresses our customers need for eCommerce logistics.”

In Ocean, profitability in Q2 was driven by revenue growth to USD11.1bn from USD6.6bn and EBIT increased to USD3.6bn from USD500mn. The growth came from a 15% rebound in volumes and an increase in average freight rates of 59%, as both long-terms contracts rates with key clients increased and short-term contracts were still impacted by congestion and bottlenecks.

Logistics & Services delivered 38% revenue growth to USD2.2bn in Q2 with more than half coming from the top Ocean customers. Demand was strong across all product families and consequently EBIT more than tripled to USD153m compared to USD42m in the same quarter last year, leading to an EBIT margin of 7.1%.

Also, Gateway Terminals had a strong Q2 with volumes rebounding 24% and persisting high storage income. Revenue increased to USD969m from USD723m last year, while EBIT doubled to USD302m leading to an EBIT margin of 31.1%.

“The outlook for Q3 is strong and we expect that the current momentum in Ocean will continue into Q4, also benefitting our Terminals business. Logistics & Services will continue its strong growth pattern for the rest of the year. As communicated on 2 August, we have upgraded our guidance for 2021 to an underlying EBITDA of USD18-19.5bn, an EBIT of 14-15.5bn and a free cash flow expected to be minimum USD 11.5bn,” Skou said.

Ocean is still expected to grow in line with global container demand, which is now expected to grow 6-8% in 2021 (previously 5-7% in 2021), still primarily driven by the export volumes out of China to the USA.

For 2021-2022, the expectation for the accumulated CAPEX remains to be around USD7bn.

Earnings in Q3 are expected to exceed the level for Q2 2021. Trading conditions for the quarters ahead are, however, still subject to a higher-than-normal volatility due to the temporary nature of current demand patterns, disruptions in the supply chains and equipment shortages.