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Danish shipping giant A.P. Møller – Mærsk A/S released first quarter of 2019 with a 33% increase in EBITDA earnings to $1.2 billion but said still facing considerable uncertainties from weaker macro numbers and the risk from trade tensions and implementation of IMO 2020.

Maersk Container Wharf

Maersk is the world's largest container shipping company.

Earnings

A.P. Moller - Maersk first quarter of 2019 earnings rose 33 percent before interest, tax, depreciation and amortization (EBITDA) to $1.2 billion. Group revenue grew by 2.5 percent to $9.5 billion in the first quarter of 2019 compared to that of 2018.

"We are still facing considerable uncertainties from weaker macro numbers as well as the risk from trade tensions and implementation of IMO 2020,” said Søren Skou, CEO of A.P. Moller - Maersk. “In Q1, volumes on trans-Pacific trade between Asia and North America have shown signs of decline, and new tariffs can potentially reduce expected growth in global container volumes by up to one percentage point."

Market Reaction Friday Stock price: AMKBF (OTCMKTS) $1,192.36 -$87.34 (-6.83%)

Maersk Global Container Growth 2019 Q1

Highlights

Moller-Maersk's overall transport and logistics business has grown significantly over the last few years - both organically and inorganically through the acquisition of Hamburg Süd.

  1. Profitability in Ocean increased. EBITDA grew 42 percent to $927 million compared to same period last year, mainly driven by a 3.9 percent increase in average loaded freight rates and an improvement in total operating cost of 2.8 percent.
  2. Revenue increased to $6.9 billion despite lower volumes which declined 2.2 percent, impacted by the front-loading seen on the Pacific trades in Q4 2018 and weak demand on Latin America and Oceania trades.
  3. The opening of the Moin terminal, Costa Rica, and positive underlying volume growth in gateway terminals had a positive impact on terminal profitability in the quarter.
  4. However, Logistics & Services reported a decrease in revenue driven by lower air freight forwarding revenue.

"We made good progress on the transformation, where we have completed the separation of the energy businesses, further integrated our organization and continued to improve our product portfolio. This resulted in a solid cash return on invested capital and delivery of synergies, getting us closer to our target of $1 billion by end of 2019," says Skou.

Maersk Global East West Imports 2019 Q1

Outllook

CEO Skou remains positive about the shipping company's strategy to transition out of the energy business. Group revenue grew by 2.5 percent to $9.5 billion in the first quarter of 2019 compared to that of 2018. "With a strong free cash flow of $3.5 billion after the sale of the remaining shares in Total SA., we have significantly strengthened our balance sheet," he said.

Total purchased Maersk Oil in 2017, and Maersk Drilling became a stand-alone company in 2018. The company has successfully concluded the separation of Maersk Tankers, Maersk Oil and Maersk Drilling. The Energy division will close down at the latest by the end of June 2019.

Subject to the current risk of further restrictions on global trade and other external factors impacting freight rates, bunker prices and foreign exchange rates, A.P. Moller - Maersk reiterated its guidance of an EBITDA of around $5 billion.

Maersk Global Exports 2019 Q1

About A.P. Moeller-Maersk A/S

A.P. Moeller-Maersk A/S is a Denmark-based shipping and oil company. It is active in the container logistics and upstream oil value chains. The Company's operational structure comprises eight segments: Maersk Line, APM Terminals, Damco, Svitzer, Maersk Oil, Maersk Drilling, Maersk Supply Service and Maersk Tankers. 

Maersk Line manages the Company's global container shipping activities. APM Terminals is responsible for container services and terminal activities, includes container shipping line Hamburg Sudamerikanische Dampfschifffahrts-Gesellschaft KG. Damco is engaged in supply chain management services. Svitzer is engaged in towing and related marine activities. Maersk Oil is active in gas exploration and production. Maersk Drilling operates land-rigs, as well as offshore drilling activities. Maersk Supply Service manages the Company's global offshore marine services. Maersk Tankers ships refined oil products.

The company has successfully concluded the separation of Maersk Tankers, Maersk Oil and Maersk Drilling. The Energy division will close down at the latest by the end of June 2019.

Source A.P. Møller – Mærsk A/S

From The TradersCommunity News Desk

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