Shipping Giant Maersk Posts Record Earnings for 2022 but Flags Red Signs Ahead

UTC by Bhushan Akolkar · 3 min read
Shipping Giant Maersk Posts Record Earnings for 2022 but Flags Red Signs Ahead
Photo: Maersk / Facebook

During the last year of 2022, Maersk benefitted greatly from the surge in ocean freight rates. In its forward-looking guidance for 2023, the Danish shipping giant is expecting a drop in the EBITDA.

On Wednesday, February 8, Danish shipping giant Maersk reported its earnings for the fourth quarter of 2022. Although the container shipping firm reported a drop in its Q4 earnings, it posted the best full-year results in its history.

Maersk in 2022

Maersk has been at the center of conducting a majority of global trade. During the fourth quarter, the company’s interest, taxes, depreciation, and amortization (EBITDA) reached a staggering $6.5 billion which was down from $8 billion in the same quarter of the previous year of 2021.

For the entire year of 2022, the company’s EBITDA grew to $36.84 billion making it the strongest-ever full year for the Danish shipping giant. However, it was still below the company’s forward guidance of $37 billion.

Supported by a continuous surge in ocean freight rates, Maersk registered an “exceptional” the year of 2022. But former CEO Søren Skou has warned of “dark clouds on the horizon” adding that the rates have peaked and any normalization going ahead could have a negative impact on the company’s revenues.

In a statement on Wednesday, new Maersk CEO Vincent Clerc who joined at the beginning of 2023, said that the last year of 2022 was remarkable in more than one way. Clerc noted:

“While we report the best financial 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. 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.”

Global Container Market for 2023

During the fourth quarter, Maersk’s loaded volume dropped by 14% on the year while the company’s loaded freights dropped by 3.5% the year. As a result, the revenue dropped slightly to $17.8 billion for the quarter.

Over the course of the year, the company had to take a revenue hit of $511 million after announcing to wind down its operations in Russia. The good thing was that during Q4 2022, the company reported a free cash flow of $6.5 billion and also issued a $685 million share buyback.

Besides, the company has also raised its evidence to  4,300 Danish krone ($620.33) per share from 2,500 DKK per share. sharing its outlook for 2023, Maersk is expecting the underlying EBITDA to take anywhere between $8 billion to $11 billion. The company stated that its guidance was based on the “expectation that inventory correction will be complete by the end of H1 leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%.”

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