On August 2, A.P. Moller – Maersk gave market watchers a taste of what was to come, reporting an unaudited second quarter revenue of $ 14.2 billion, an underlying EBITDA of $5.1 billion and an underlying EBIT of $ 4.1 billion. It also revised its full year guidance for 2021 upwards with an underlying EBITDA now expected in the range $18-19.5 billion (previously $13-15 billion) and underlying EBIT expected in the range of $14-15.5 billion (previously $9-11 billion).
Today, we heard more of the story, with Maersk reporting full second quarter results that showed the company continuing to deliver strong growth and profitability, with record-breaking performance marking the 12th quarter of successive year-on-year earnings progress.
As foreshadowed in the August 2 guidance, revenue grew 58% to $14.2 billion in the quarter and EBIT increased almost five times to $ 4.1 billion. The net result came in at $ 3.7 billion in the second quarter, bringing the net result for the first half of 2021 to $ 6.5 billion. Return on invested capital (ROIC) is now at 23.7% for the past 12 months.
MOVE INTO E-COMMERCE
Maersk’s news today was not confined to its earnings. Noting that “market dynamics are changing and we see more and more consumers doing their shopping online,” Maersk revealed that it has acquired Visible Supply Chain Management, a U.S. based business-to-consumer (B2C) logistics company focused on parcel delivery and e-fulfillment services in the U.S., and reached an agreement to acquire Dutch-based B2C Europe, a logistics company focused on B2C parcel delivery services in Europe.
“The strong results benefited both from the exceptional circumstances in Ocean, where congestion and bottlenecks continued to drive up rates, and from solid progress in executing on our strategic transformation where we kept a firm focus on our customers need for integrated solutions across their supply chains,” said Søren Skou, CEO of A.P. Moller – Maersk. “I am pleased with the strategic progress we have made and the high value generation. We continue to build a higher quality Ocean business with more long-term contracts, a rapidly growing logistics business, and a value creating terminals business. Our exceptional earnings and high cash flow enable us to further accelerate our transformation, invest in growing our activities, also through acquisitions and at the same time return cash to shareholders. To that effect we also announced today the acquisitions of Visible SCM and B2C Europe which complements our existing supply chain offering and addresses our customers need for E-commerce logistics.” .
In Ocean, profitability in the second quarter was driven by revenue growth to $ 11.1 billion from $ 6.6 billion and EBIT increased to $ 3.6 billion from $ 0.5 billion. The growth came from a 15% rebound in volumes and an increase in average freight rates of 59%, as both long-terms contracts rates with key clients increased and short-term contracts were still impacted by congestion and bottlenecks.
Logistics & Services delivered 38% revenue growth to $ 2.2 billion in the second quarter with more than half coming from the top Ocean customers. Demand was strong across all product families and consequently EBIT more than tripled to $153 million compared to $42 million in the same quarter last year, leading to an EBIT margin of 7.1%.
Also, Gateway Terminals had a strong second quarter with volumes rebounding 24% and persisting high storage income. Revenue increased to $969 million from $ 723 million last year, while EBIT doubled to $ 302 million leading to an EBIT margin of 31.1%.