Maersk Q4 Profit Surges, but 2025 Earnings Seen Softening

A.P. Møller - Mærsk A/S (Maersk), the world's leading maritime transport company, reported strong financial results for the fourth quarter and full year 2024, driven by robust container market demand and the continuation of the Red Sea situation. The company's Q4 profit beat analyst estimates, but it expects softer earnings in 2025 due to increased uncertainty and potential supply-demand imbalances.

Maersk's Q4 revenue reached USD 15.8bn, with underlying EBITDA of USD 4.8bn and underlying EBIT of USD 3.3bn (reported: USD 3.3bn). The company's Ocean segment saw a 41% increase in revenue and an EBIT increase of USD 2.9bn, driven by higher freight rates and positive volume growth. Logistics & Services and Terminals segments also contributed to Maersk's strong performance, with revenue growth and improved profitability.

Maersk's CEO, Vincent Clerc, stated, "Our ability to navigate shifting circumstances and ensure steady supply chains for our customers was put to the test throughout 2024. Our efforts were rewarded with record-high customer satisfaction. We successfully capitalized on increased demand while enhancing productivity and rigorously managing costs – all of which contributed to our strong financial performance."

However, Maersk's outlook for 2025 is subject to considerable macroeconomic uncertainties impacting container volume growth and freight rates. The company expects global container market volume growth for the full year to be around 4%, with a likely supply-demand imbalance due to continued new deliveries in the container shipping industry and a potential re-opening of the Red Sea. Maersk now expects full-year 2025 underlying EBITDA of USD 6.0 to 9.0bn and underlying EBIT of USD 0.0 to 3.0bn, with free cash flow (FCF) or higher at -3.0 billion.

To mitigate potential challenges in 2025, Maersk plans to focus on growth in line with the market, navigate supply-demand imbalances, maintain cost discipline and productivity gains, invest in capacity and equipment, diversify and integrate its business, and continue its commitment to sustainability initiatives. The company's strategic moves aim to ensure it remains competitive and continues to deliver strong financial performance despite the uncertainty surrounding the Red Sea situation and global container volume growth.

Maersk's strong Q4 performance and strategic initiatives suggest a positive risk-reward balance for investors, despite the uncertainty in the market. By capitalizing on market growth, maintaining operational excellence, and mitigating risks, Maersk is well-positioned to navigate the challenges and opportunities in the coming year.