A.P. Moller-Maersk A/S, a leading indicator of international trade Guidance for 2023 is based on the expectation that inventory correction will be complete by the end of the first half leading to a more balanced demand environment. 2023 global GDP growth is estimated to be ‘‘muted’’ and global ocean container market expansion is to be in a range of -2.5% to +0.5%. A.P. Moller-Maersk anticipates growing in line with the market.
In 2022, A.P. Moller – Maersk (Maersk) delivered an exceptional financial performance in line with full-year guidance; Revenue increased by 32% to USD 81.5bn, and EBIT increased by 57% to USD 30.9 billion.
After two years of unusually high freight rates caused by supply bottlenecks and a lack of vessels, the shipping market has returned to normal. During this time, Maersk and its competitors were able to charge higher fees for their services and make record profits.
After a time when the demand has been “absolutely exceptional,” the world is facing “a huge inventory adjustment,” said Vincent Clerc, who assumed the role of CEO at the beginning of the year, in an interview with Anna Edwards and Mark Cudmore on Bloomberg TV.
As the world has become a bit more normal after the pandemic, the company has seen some of these demands decelerate, the CEO said.
The Copenhagen-based container titan said it anticipates expanding in line with the market, as it unveiled guidance for 2023 that missed analyst estimates. Its shares primarily plunged as much as 5.7% in the Danish capital, before paring the loss and trading as much as 2.9% greater.
Maersk, which manages about one-sixth of all the world’s containers, said on Wednesday demand in the container shipping industry is set to be on a scale of negative 2.5% to positive 0.5%. That equates with a November prediction of a ‘‘broadly flat to negative’’ market.
The ‘overconsumption of goods’’ is now leading to a razor-sharp correction’ in demand, the Danish company said in a statement. Its key market China is battling under pressure, and many emerging markets are susceptible, as they move into the slowdown with high debt levels, Maersk added.
With economic activity slowing and supply chain blockages easing during 2022, businesses started to accumulate inventory resulting in a drag on trade activity, it said. Volumes in its Ocean segment plummeted 14% in the last three months of the previous year from the same period a year earlier, with the fall noticed across most ocean routes, the company said.
Maersk’s core earnings before interest and tax could be as slightly as $2 billion in 2023 associated with $31.2 billion in 2022, the company projected. In the first quarter, the company also anticipates booking a restructuring charge of $450 million on its brands.
The team believes that this guidance reflects the considerably lower container freight rates going into 2023 but also very low visibility in the container market prospect, Brian Borsting, a credit analyst at Danske Bank A/S, said in a comment. Furthermore, the CEO just took office – therefore probable to be slightly conservative on the 2023 outlook in its view.
About A.P.Moller – Maersk
From its initial beginnings as a steamship company to becoming the Global Integrator of Logistics, its legacy has many components. The company is honoured of its extensive chronicle of associating with the world and delivering value through its actions, goals, and commitments.
The increasing complexity of global supply chains is making them vulnerable, inefficient, and unsustainable. At Maersk, its strategic vision is to become the ‘Global Integrator’, offering truly integrated logistics solutions that connect, protect, and simplify our customers’ supply chains.
Committed to sustainability
Maersk’s purpose serves as the foundation and compass for managing its work towards a world where global trade distributes social and economic benefits, without adversely impacting individuals, the environment, or the communities.
This is why sustainability is integrated into the company’s purpose. As real shared value can only be delivered through logistics solutions that are digitized, integrated, decarbonized, and democratized – so that global trade is inclusive and sustainable, and the benefits are felt by as many people as possible.