By Godwin Oritse

Maersk Group, operators of A. P Moller Terminals and Mearsk Shipping Line, has recorded a 26 percent rise in revenue to $39billion in 2018 as against $31billion in 2017.

Highlights of the financial report showed an increase of eight percent was also recorded in profit before depreciation and impaired losses at $3.8billion against $3.532billion in 2017.

Parts of the reports read “In 2018, we made significant progress in implementing our strategy. With the expected demerger and listing of Maersk Drilling in April, the separation of our Energy-related businesses will be almost complete.

“We have successfully integrated Hamburg Süd, accelerated our digital transformation and come together across sales, customer service, delivery and products as one company with customers at the centre of our attention.

“ We are starting to see growth both in Ocean and non-Ocean segments,” said Søren Skou, CEO of A.P. Moller – Maersk.

Profitability was in line with the latest guidance for 2018, with earnings before interests, tax, depreciation and amortization (EBITDA) of $3.8billion, up 8% over 2017.

“The improvement in operating earnings was driven by higher freight rates, efficiencies gained from the integration of continuing operations, and synergies from the acquisition of Hamburg Süd. “However, margins in continuing operations were challenged and EBITDA was lower than initially expected at the beginning of the year, primarily due to an increase in bunker fuel prices not fully recovered by higher freight rates.

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“Although we had a challenging start to 2018, looking at our financial performance, we increased earnings despite significantly higher bunker fuel prices and lower than expected container volume growth in the second half of 2018. However, profitability needs to improve,” said Søren Skou. During 2018, net interest-bearing debt was significantly reduced from USD 14.8bn to USD 8.7bn and the company remains investment grade rated.

“The organic volume growth in Ocean is expected to be in line with the estimated average market growth of 1-3% for 2019. Guidance on CAPEX is around USD 2.2bn and high cash conversion (cash flow from operations compared with EBITDA) is expected.

“Maersk’s guidance for 2019 is subject to considerable uncertainties due to the current risk of further restrictions on global trade and other factors impacting container freight rates, bunker prices and foreign exchange rates.”

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