Søren Skou, CEO of A.P. Moller – Maersk, has once again lashed his shipping division, the world’s largest containerline, for failing to make enough profits.
Unveiling the Danish group’s first quarter results today, Skou said the ocean part of the business had delivered “unsatisfactory” results, and measures were being taken to improve performance.
Overall, the group saw revenue growth of 30% to $9.3bn in the first quarter, 10% if one excludes the recent acquisition of German liner, Hamburg Süd.
Skou commented: “[O]n the short-term performance, our result especially in the ocean related part of the business was unsatisfactory. In response to the current challenging market conditions we are implementing a number of short-term initiatives to improve profitability”.
Maersk’s container shipping division saw revenue growth of just 2.2% during the first three months of the year, slightly below estimated global demand growth of 3-4%.
A new financial reporting structure has been implemented from Q1 2018 to support the strategic direction Maersk has set itself of becoming “the global integrator of container logistics”. The four new business segments (Ocean, Logistics & Services, Terminals & Towage and Manufacturing & Others) are aligned with what the group described as a “strategic focus on growing the non-ocean part of the business disproportionally to the ocean”. This is in line with recent comments from Maersk officials who have made it clear they want to chase the likes of FedEx and UPS to remain relevant in the rapidly changing world of freight transport.
The group reiterated its expectations for 2018 of an underlying profit above 2017’s total of $356m, however noting increased uncertainties due to geopolitical risks, trade tensions and other factors impacting freight rates, bunker prices and rates of exchange.
✅ Closed the sale of Maersk Oil
✅ Progress on digital transformation
✅ 30% revenue growth
❌ Unsatisfactory short-term performance
— Maersk (@Maersk) May 17, 2018