A.P. Moller-Maersk Hit By Q4 Loss, Buyback Termination, FY24 Warning

(RTTNews) - Shares of A.P. Moller - Maersk A/S were losing around 16 percent in the morning trading on Denmark stock exchange after the logistics major reported Thursday a loss in its fourth quarter, compared to prior year's profit, on weak revenues. The results were impacted by downward pressure on rates and oversupply in Ocean, despite increasing volumes.

Looking ahead for fiscal 2024, the company projects an underlying EBIT loss between $5.0 billion and $0.00 billion amid the significant oversupply challenges and high uncertainty about the duration and degree of the Red Sea disruption.

Separately, the company said it has decided to terminate the fifth phase of the share buy-back program of 11 billion Danish Kroner or around $1.6 billion, with immediate effect.

CEO Vincent Clerc said, "The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results. The ongoing disruptions and market volatility emphasize the need for supply chain resilience, further confirming that Maersk's path toward integrated logistics is the right choice for our customers to effectively manage these challenges."

For fiscal 2024, A.P. Moller - Maersk also expects an underlying EBITDA of $1.0 billion to $6.0 billion. In fiscal 2023, underlying EBIT was $3.96 billion, and underlying EBITDA was $9.77 billion.

Further, in line with its Global Integrator strategy, A.P. Moller-Maersk said its Board of Directors has decided to initiate the separation of its towage and marine services activities through a demerger.

As part of the demerger, the shares in Svitzer A/S and its subsidiaries as well as certain other related assets and liabilities will be contributed to a new legal entity under the name of Svitzer Group A/S. Its shares will be admitted for trading and official listing on Nasdaq Copenhagen A/S.

Svitzer will continue to be headquartered in Copenhagen and operate under the Svitzer name.

In the fourth quarter, the company's loss was $436 million, compared to prior year's profit of $4.95 billion. Loss per share was $27, compared to profit of $277 a year ago.

Underlying loss was $442 million, compared to profit of $4.86 billion a year ago.

Profit before depreciation, amortisation and impairment losses, etc. or EBITDA plunged to $839 million from last year's $6.54 billion.

The company reported a decrease in Ocean of $5.8 billion because of significantly lower freight rates.

EBITDA margin fell to 7.1 percent from 36.7 percent a year ago.

A.P. Moller - Maersk's revenue fell 34.1 percent to $11.74 billion from last year's $17.82 billion. The revenue was hit by $6.1 billion lower revenue in Ocean and lower revenue in Logistics & Services with revenue on par in Terminals.

Ocean reported a significant increase in loaded volumes of 11 percent, due to improved global consumer demand, among other things following the normalisation of the inventory levels in North America.

Meanwhile, Ocean EBITDA was $196 million, compared to last year's $6.0 billion as the increase in offered capacity in the market has put pressure on the rates which developed negatively across geographies.

In Denmark, AP Moeller - Maersk shares were trading at 10,865 Kroner, down 15.6 percent.

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