EBITDA increased to US$ 4bn from US$ 1.5bn YoY during this period
AP Moller-Maersk had an exceptionally strong start to the year, with strong earnings and growth momentum across all our businesses in ocean, port services and logistics. The company benefitted from strong demand in a market still influenced by the pandemic and significant disruptions in global supply chains, it reported in a press communiqué.
Strong demand coupled with significant operational challenges such as bottlenecks, lack of capacity and equipment shortage in global supply chains drove freight rates up significantly. At the same time, customers’ demand for truly integrated supply chains and simple, self-service solutions has never been more evident and this provides momentum, especially for logistics and digital solutions.
“AP Moller-Maersk delivered an exceptionally strong performance in Q1-2021 with record profit for the quarter. The high growth and profitability were driven by solid demand across Ocean, Logistics and Terminals. Strong demand led to bottlenecks and a lack of capacity and equipment, which drove up freight rates to record-high levels,” commented Søren Skou, CEO, AP Moller–Maersk.
EBITDA surge
Overall in Q1-2021, EBITDA increased to US$ 4bn from US$ 1.5bn year on year and EBIT to US$ 3.1bn from US$ 552mn compared to same quarter last year, while revenue improved by 30 per cent to US$ 12.4bn.
Logistics & Services continued with strong growth momentum and revenue increase of 42 per cent in Q1-2021 to US$ 2bn, mainly driven by organic growth, but also with growth from the acquisitions of Performance Team and KGH Customs Services.
Also, Gateway Terminals had a strong Q1-2021 performance, with revenue increasing by 24 per cent to US$ 915m from US$$ 740m led by higher volumes and storage income, while EBITDA increased by 52 per cent to US$ 323m from US$ 213m.
Guidance for 2021
- Given the result in Q1-2021 and the expectation is that the exceptional market situation will continue well into the fourth quarter of 2021, the full-year guidance has been revised upwards on 26 April 2021 to:
- Underlying EBITDA is in the range of US$ 13.0-15.0bn (previously US$ 8.5-10.5bn) compared to US$ 8.3bn in 2020
- Underlying EBIT is in the range of US$ 9.0-11.0bn (previously US$ 4.3-6.3bn) compared to US$ 4.2bn in 2020
Free cash flow of minimum US$ 7.0bn (previously above US$ 3.5bn) compared to US$ 4.6bn in 2020.
As part of the full-year guidance for 2021, the company now expects the current exceptional situation, with the demand surge leading to bottlenecks in the supply chain and equipment shortage, to continue well into the fourth quarter of 2021 versus previously expected to continue in Q1-2021 and normalise thereafter. As expected, profitability in Q1-2021 was above Q4-2020.
Ocean is still expected to grow in line with global container demand, which is now expected to grow by 5-7 per cent in 2021 (previously 3-5 per cent. in 2021), primarily driven by the export volumes out of China to the USA, with the highest growth seen in the first half-year.
For the years 2021-2022, the accumulated CAPEX is now expected to be around US$ 7bn (previously US$ 4.5-5.5bn), the press statement concluded.
