Profits delivered despite growing fuel costs, lockdowns and pandemic
AP Moller-Maersk has reported a financially strong start to the year.
Despite the Covid-19 pandemic’s profound impact on global trade the company kept momentum in its strategic transformation and demonstrated robustness to weather the crisis, the company stated in a press communiqué.
“In the first quarter of the year, AP Moller-Maersk again delivered profitable growth. Operating earnings increased by 23% YoY, and cash return on invested capital increased by 3.5 percentage points to 10.5%. The strong results were made during a quarter despite sharp fuel cost increases derived from the industry’s switch to low-sulphur fuel and on the backdrop of a contraction in global trade due to lockdowns in most regions,” stated Søren Skou, CEO, AP Moller-Maersk.
Earnings before interest, tax, depreciation and amortization (EBITDA) improved 23% to US$ 1.5bn compared to Q1-2019 and the EBITDA margin increased to 15.9%. Revenues increased slightly to US$ 9.6bn, despite lower volumes and mainly driven by Ocean.
Return on invested capital after tax (ROIC), last twelve months, grew to 3.8% as earnings improved and invested capital was reduced. Free cash flow was US$ 506m after capitalized lease payments and gross capital expenditures excluding acquisitions (CAPEX) was at US$ 310m compared to US$ 778m in Q1-2019, reflecting ongoing strong capital discipline.
In the landside businesses, Logistics & Services excluding the freight forwarding business improved EBITDA to US$ 69m from US$ 49m. Infrastructure, which covers Terminals & Towage, and Logistics & Services, but excluding freight forwarding, reported a decrease in revenue to US$ 2.1bn compared to US$ 2.3bn in the same period last year due to lower revenue following Covid-19.
