DENMARK – Maersk’s first-quarter financial results for 2024 showed a sharp drop in EBIT, falling 92% year-on-year.
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Despite this decline, the company reported improvements in earnings compared to the fourth quarter of 2023, with revenues of USD 12.4 billion.
This figure is a slight decrease from last year’s USD 14.2 billion. EBITDA also declined, from USD 3.4 billion in Q1 2023 to USD 1.5 billion in Q1 2024.
Q1 performance analysis
Maersk’s EBIT plummeted to USD 117 million from last year’s USD 2.3 billion. Vincent Clerc, CEO of Maersk, attributed the downturn to the Red Sea crisis, which led to supply chain disruptions and increased market rates and costs.
Clerc said that these conditions are expected to persist into the second half of the year. As a result, Maersk adjusted its EBIT expectations to a range of -USD 2.0 billion to USD 0.0 billion.
Clerc stated that Maersk had a positive start to the year, with the first quarter developing as expected. He noted that strong volumes and high-capacity utilization contributed to better results compared to the previous quarter.
The modal shift from container trade to air freight due to the Red Sea situation, a surge in e-commerce, and favorable base effects further bolstered demand.
However, Clerc acknowledged the impact of new vessel deliveries, which may place additional pressure on ocean markets.
Ocean and logistics challenges
The ongoing Red Sea crisis impacted Maersk’s ocean segment, resulting in disruptions to the supply chain.
Nonetheless, the company experienced improved results due to strong volumes and cost discipline. In contrast, the Logistics & Services division faced margin challenges due to underutilization in certain warehouses and short-term difficulties in implementing new contracts in the North American ground freight business.
Despite these challenges, Maersk reported a significant increase in air freight volumes, up 52% from Q1 2023.
The company handled 85,000 tons of air freight in the first quarter, matching the fourth quarter of 2023. Maersk’s focus on end-to-end logistics included spinning off Svitzer, a decision approved by an Extraordinary General Meeting on April 26 and completed on April 30. Svitzer Group A/S is now listed on the Nasdaq Copenhagen.
Market outlook
Maersk anticipates that ongoing supply challenges will persist throughout the year. The continued disruption in the Red Sea/Gulf of Aden area is expected to keep affecting Maersk’s operations, although the company projects that oversupply will eventually stabilize.
Maersk’s adjustment of its financial guidance to align with expected market demand, including a focus on container volume growth, highlights the company’s commitment to navigating the uncertain market conditions and achieving resilience in its operations.
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