The world’s biggest ocean carrier, Denmark’s A.P. Moller-Maersk, on Wednesday reported a sharp rise in earnings for the fourth quarter, when global demand for goods rebounded from an earlier slump caused by the coronavirus pandemic.
The Copenhagen-based company reported a net profit of US$1.3 billion in the fourth quarter of last year from a loss of $72 million a year earlier. Revenue rose 16 percent to $11.3 billion.
CEO Soeren Skou said the quarter was marked “on the one hand by a continuous impact of the COVID-19 pandemic” but also “by some rewarding progress on our strategy to become the integrator of container logistics.”
Skou said the Danish company’s main operations “performed at record level in the quarter as a consequence of the strong rebound of demand which led to full capacity utilization.” He, however, noted that the full capacity situation within the company led to “bottlenecks, higher costs and difficulties in meeting our customer reliability promises.”
Logistics & Services grew to $7 billion, compared to $6.3 billion last year, and profits improved 110 percent to $454 million, supported by the acquisition of Performance Team as well as improved results in intermodal, air freight forwarding and warehousing and distribution.
Gateway terminals saw a decrease in revenue of 3.9 percent to $3.2 billion in 2020 because of lower volumes due to the pandemic. Profit increased by 8.3 percent to $989 million, reflecting an improved profit margin to 31 percent driven by higher revenue per move and cost reductions in several terminals.
Maersk’s business is closely watched as a barometer of global trade.
Skou noted that he saw Maersk continuing to grow its earnings “as the economic situation normalizes in 2021 and beyond.”
The company expects Q1 2021 to be stronger than Q4 2020, and then foresees a levelling out. EBITDA is forecast to be in the range of $8.5 to 10.5 billion, compared to $8.3 billion in 2020.
Ocean is expected to grow in line with the global container demand at an expected three to five percent in 2021, with the highest growth seen in the first half-year.