The largest Danish freight carrier has solid revenue growth, but there are concerns about the future.
According to the Maersk report, for the third quarter of this year, revenue increased by 37%.
At the same time, its steady growth is noted in all three main areas of the company’s activities.
Sea transportation
Here, the increase in revenue is largely due to the increase in freight rates.
The difficult geopolitical situation has led to the fact that in the directions of Asia — the USA and Asia — Europe, transportation has risen significantly in price.
This made it possible to increase revenue, despite the fact that traffic volumes decreased.
The fact that shipping revenue has increased is critical to Maersk, as fuel prices have also risen significantly and the difference needs to be made up.
Logistics and other services
Revenue in this segment grew by 60%, there are two reasons for such explosive growth.
- Volume increase.
Basically, we are talking about 200 large customers of the company, who began to order more services.
- Growth through acquisitions.
This year, Maersk has expanded through the acquisition of a number of other companies, such as the Martin Bencher Group.
In total, this allowed us to significantly increase our capacities through the acquisition of warehouse, refrigeration and other areas in Latin America, Europe and India. In the future, this may even more significantly increase revenue figures.
- Terminals.
Here, too, we see an increase in revenue due to a simultaneous increase in both volumes and prices.
However, there is also a negative: for example, Maersk had to sell its stake in the Russian company Global Ports Investments.
Although this increased revenue for the last reporting period, it may lead to its reduction in the future.
Will the recession reduce performance?
Economic activity is now expected to slow down almost all over the world due to the huge burden of financial problems in the leading countries.
All this, according to Maersk forecasts, can reduce the demand for container transportation by 2-4% already this year.
We are already seeing a 3% drop. The inevitable consequence of such a slowdown may be a decrease in freight prices.
On the other hand, in China today they are starting to talk about lifting covid restrictions.
If this really happens in the foreseeable future, it will start the opposite trend: the recovery of the economy and demand, and given the critical role of China in the global system, the momentum may be strong enough to revive, including the logistics sector.
