Q2 2024 AP Moeller - Maersk A/S Earnings Call Transcript
Key Points
- A. P. Moller Maersk A/S (AMKAF) reported strong market demand leading to volume growth across all segments.
- The company achieved an EBITDA of $2.1 billion and an EBIT of $1 billion, demonstrating agility and adaptability.
- Logistics & Services saw organic growth momentum and a sequential rebound in EBIT margin to 3.5%.
- Terminals segment delivered one of the highest EBITDA levels ever, driven by higher volumes and ancillary revenues.
- Raised guidance for 2024 to an underlying EBITDA of $9 billion to $11 billion and an underlying EBIT of $3 billion to $5 billion, with a free cash flow of at least $2 billion.
- The EBIT margin in Logistics & Services, although improved, is still below the target of 6%.
- The ongoing disruption in the Red Sea has led to constrained vessel capacity and port congestion.
- Higher spot rates have not yet fully materialized into higher realized rates in the Ocean segment.
- There is uncertainty about the extent to which strong volume demand will hold up into Q4, adjusted for normal seasonality patterns.
- The company faces significant and potentially sticky extra costs to maintain cargo flow fluidity, including higher charter rates and more equipment needs.
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Hello, everyone, and thank you for joining this earnings call today as we present our second quarter results for 2024. My name is Vincent Clerc. I'm the CEO of AP Moeller - Maersk. And with me in the room today is our CFO, Patrick Jany.
As usual, we will start with the highlights from the quarter just passed. The second quarter was marked by increased momentum and ramp-up in earnings relative to the first. We saw strong market demand, which gave volume growth tailwinds across all our segments, and a continuation of the situation in the Red Sea, which led to constrained vessel capacity and some port congestion. We closed our books with an EBITDA and EBIT of $2.1 billion and $1 billion, respectively, demonstrating agility and adaptability in the face of a dynamic market environment.
In Logistics & Services specifically, organic growth is gaining momentum following the normalization we saw in 2023 with a higher profitability. We also saw the EBIT margin rebound
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