Growth driven by higher container demand and higher freight rates
Danish group A.P. Moller-Maersk (Maersk) achieved financial growth in all segments of its business in 2024. Earnings before interest and tax (EBIT) for the previous year increased by 65%, amounting to $6.5 billion, according to the company's report.
It is noted that the positive results were due to higher container demand and higher freight rates in the liner shipping segment, as well as an increase in revenue and transhipment volumes in the terminal division and significant growth in the logistics and services division.
Compared to 2023, profitability in Maersk's liner shipping division improved, which was due to a significant increase in sea freight rates due to the situation in the Red Sea and high demand for shipping volumes. The company's operating costs have remained stable in recent years, offsetting increased costs and additional bunker fuel consumption when rerouting around the Red Sea around the Cape of Good Hope.
In the Logistics and Services division, each quarter of the last year showed an increase in cargo volumes compared to 2023. Revenue increased year-on-year by 7%. The turnover margin also improved.
In the Terminal division, EBITDA and EBIT in 2024 were record-breaking compared to the previous year. This was due to a significant increase in gross profit due to higher transhipment volumes, along with higher tariffs to compensate for inflation, an improved customer and product portfolio, and higher income from warehousing.
In 2024, Maersk returned $1.6 billion to shareholders through dividend payments and a share buyback program. The demerger and spin-off of Svitzer returned $1.1 billion to shareholders through a dividend in kind. Based on the strong performance and improved balance sheet, the Group’s Board of Directors proposes a dividend of DKK 1,120 per share to shareholders. The Board also announced a share buyback program of DKK 14.4 billion (approximately $2 billion) to be implemented during 2025.
Maersk expects global container volumes to increase by around 4% in 2025, growing in line with market demand. The company expects the supply and demand imbalance to widen due to new vessel introductions and the possibility of resuming the Suez Canal and Red Sea routes, which could be offset by supply and demand factors.
