Maersk Records Third-Highest Financial Year Performance
A.P. Moller – Maersk, one of the world’s largest shipping and logistics companies, has announced robust financial results for 2024, marking one of the best years in its history. The company achieved significant growth across all its business segments, with a remarkable 65% increase in earnings before interest and taxes (EBIT), reaching an impressive USD 6.5 billion. The stellar performance was primarily driven by heightened container demand, elevated freight rates in the Ocean segment, and strong top-line and volume growth in Terminals. Additionally, the company witnessed solid improvements across various Logistics & Services products.
Financial Performance Overview
In 2024, Maersk experienced a surge in profitability, fueled by favorable market conditions and the company’s strategic initiatives to optimize operations and enhance service offerings. The strong financial results were bolstered Records by increasing freight rates in the Ocean segment, particularly due to supply chain disruptions in the Red Sea. The company efficiently navigated these challenges through high utilization rates and stringent cost discipline, ensuring that its Ocean operations remained streamlined and resilient.
Furthermore, Maersk successfully mitigated the impact of increased operational costs and additional bunker consumption that resulted from rerouting its network south of the Cape of Good Hope. The disciplined cost management approach helped maintain Records stable year-on-year operational costs, allowing the company to sustain profitability while addressing external challenges.
Given its strong financial performance and a solid balance sheet, Maersk’s Board of Directors has proposed a dividend of DKK 1,120 per share. Additionally, the company has announced the initiation of a share buy-back program worth up to USD 2 billion, which will be executed over a 12-month period. These shareholder return initiatives reflect the company’s confidence in its financial health and commitment to delivering long-term value to investors.
Performance Across Business Segments
Ocean Segment: Growth Fueled by High Demand and Increased Freight Rates
The Ocean segment remained a cornerstone of Maersk’s business, contributing significantly to its overall financial performance. In 2024, profitability Records in this segment improved considerably compared to the previous year. A substantial rise in freight rates, triggered by disruptions in the Red Sea and increased volume demand, played a crucial role in driving this growth.
Despite challenges in global trade dynamics, Maersk demonstrated strong operational efficiency in its Ocean segment. The company managed to maintain high utilization levels while exercising cost discipline, ensuring a balance between demand fluctuations and operational stability. The impact of rerouting shipping routes due to geopolitical disruptions was effectively countered by cost optimization measures, allowing Maersk to maintain its market-leading position.
Logistics & Services: Steady Growth and Improved Profitability
Maersk’s Logistics & Services division showed remarkable resilience throughout 2024, with consistent momentum building each quarter. The segment achieved notable volume growth, higher revenue, and an improved EBIT margin compared to 2023.
Revenue for the Logistics & Services division grew by 7%, primarily driven by strong performances in Warehousing, Air, and First Mile product categories. These segments benefited from a combination Records of increased customer demand, enhanced service offerings, and improved supply chain efficiencies. Moreover, profitability in this segment was bolstered by advancements in various product categories, showcasing Maersk’s ability to adapt to evolving market conditions and capitalize on emerging opportunities.
Terminals: Record-High Financial Results
The Terminals division delivered its best-ever financial results in 2024, achieving record highs in both EBITDA and EBIT. This exceptional performance Records was driven by significant top-line growth, supported by increased cargo volumes and strategic tariff adjustments that offset inflationary pressures.
Maersk’s focus on optimizing its terminal operations paid off, as the company benefited from a better customer and product mix, resulting Records in higher storage revenue. The successful implementation of efficiency measures and capacity enhancements enabled the Terminals segment to achieve strong profitability and reinforce its position as a key driver of Maersk’s overall success.
Financial Guidance for 2025
Looking ahead, Maersk has provided its financial guidance for 2025, outlining its expectations for the coming year. The company anticipates that global container volume growth will be approximately 4%, with Maersk aiming to grow in line with market trends.
However, Maersk acknowledges the likelihood of a greater supply-demand imbalance in 2025, driven by continued new deliveries in the container Records shipping industry and potential changes in geopolitical factors such as the reopening of the Red Sea. While these uncertainties pose challenges, Maersk expects supply-side drivers and robust market demand to help offset some of the potential imbalances.
For the purposes of financial planning, Maersk has assumed two possible scenarios regarding the reopening of the Red Sea. Under the Records low-end guidance scenario, the Red Sea is expected to reopen by mid-year, while the high-end scenario assumes a reopening by year-end. Despite these uncertainties, Maersk remains confident in its ability to navigate the evolving market landscape and sustain its growth trajectory.
Total Shareholder Return and Capital Allocation Strategy
In 2024, Maersk returned USD 1.6 billion to shareholders through a combination of dividends and share buy-backs. A significant Records portion of this return was attributed to the demerger and spin-off of Svitzer, which resulted in an in-kind dividend distribution valued at USD 1.1 billion.
In February 2024, Maersk’s Board of Directors made the strategic decision to temporarily suspend the company’s share buy-back program. This decision Records was taken in light of ongoing market uncertainties in the Ocean segment. However, the Board has now announced the re-initiation of the program, committing up to DKK 14.4 billion (approximately USD 2 billion) for share repurchases over the next 12 months.
The company’s capital allocation strategy remains focused on maintaining a strong balance sheet while continuing to invest in strategic growth initiatives. The decision to resume share buy-backs reflects Maersk’s confidence in its long-term financial strength and its commitment to maximizing shareholder value.