Maersk reported an "exceptionally strong year" in 2022 driven by high shipping rates, but in 2023 global economic conditions would lead to a softer market, particularly in the ocean.
Maersk said in 2022, it delivered "extraordinary financial performance" in line with full-year guidance, with revenue increasing by 32% to US$81.5 billion and EBIT also rising 57% to US$30.9 billion.
"2022 was an exceptionally strong year for Maersk. The unprecedented financial results were driven by solid performance across all businesses during the abnormal market conditions in the first part of the year," the Danish shipping company said.
It added that as congestions eased and declining consumer demand led to a significant de-stocking in all segments, the expected normalization of the ocean market kicked in during the final stretch of the year.
Best financial result in history
"2022 was remarkable in more than one way. While we report the best financial result in result in the history of the company, we have also taken the partnerships with our customers to a new level by supporting their supply chains end to end during highly disruptive times," said says Vincent Clerc, CEO of A.P. Moller - Maersk.
"As we enter a year with challenging macro-outlook and new types of uncertainties for our customers, we are determined to speed up our business transformation and increase our operational excellence to seize the unique opportunities in front of us," he added.
Maersk noted that in 2022, its ocean segment delivered its strongest result on record due to the high freight rates and strong demand, particularly in the first half of the year.
The shipping line noted that Ocean revenue was up 33%, and throughout the year, it continued to deliver on the strategic transformation, maintaining a stable level of long-term contracts.
"Ocean continued to improve on delivery performance over the year as congestion eased and was able to maintain strong margins due to the contractual nature of its customer relationship," Maersk said in a statement.
Meanwhile, the Group's Logistics & Services revenue increased by 47%, with an organic contribution of 21%. The organic revenue growth came primarily from the top 200 customers as the business continues to develop integrated solutions to meet end-to-end supply chain needs.
Maersk said growth was particularly strong in warehousing, where the footprint more than doubled to 7.1m sqm with the acquisition of LF Logistics alone, adding 198 warehouses or 3.1m sqm.
In its Terminals business, Maersk said EBIT adjusted for the Russia exit reached a record of US$1.2 billion, supported by solid volumes growth and high congestion-related storage income. Based on a combination of tariff increases and efficiencies, the impact of high global inflation has been mitigated.
Maersk's 2023 guidance
Maersk noted that its 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 expected to be muted and global ocean container market growth to be in a range of -2.5% to +0.5%. A.P. Moller - Maersk expects to grow in line with the market," the Danish shipping company said.
Based on these assumptions, for the full year 2023, A.P. Moller-Maersk added that it expects an underlying EBITDA of US$8.0-11.0bn, an underlying EBIT of US$2.0-5.0bn, and free cash flow (FCF) of at least US$2.0 billion.