Latest news with #AMKAF
Yahoo
09-05-2025
- Business
- Yahoo
A P Moller Maersk AS (AMKAF) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...
EBITDA: $2.7 billion for Q1 2025. EBIT: $1.3 billion for Q1 2025, with a margin of 9.4%. Logistics & Services EBIT Margin: Improved to 4.1% year-on-year. Terminals Return on Invested Capital (ROIC): 14.5% for the quarter. Free Cash Flow: $806 million for Q1 2025. Net Profit After Tax: $1.2 billion for Q1 2025. Cash and Deposits: $22.3 billion, with a net cash position of $5.2 billion. Return on Invested Capital (ROIC): 14.3% for the last 12 months. Cash Flow from Operations: $2.8 billion for Q1 2025. Gross CapEx: $1.4 billion for Q1 2025. Ocean Utilization: 92% for Q1 2025. Terminals Revenue Growth: 23% year-on-year increase. Terminals EBIT: $394 million, with a margin of 32%. Warning! GuruFocus has detected 5 Warning Sign with AMKAF. Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. A P Moller Maersk AS (AMKAF) achieved an EBITDA of $2.7 billion and an EBIT of $1.3 billion for Q1 2025, demonstrating solid financial performance. The Logistics & Services segment showed significant year-on-year improvement in EBIT margin to 4.1%, with a target to reach 6% during 2025. The Terminals business delivered strong results with a return on invested capital of 14.5%, driven by high volumes and increased revenue per move. The company maintained a strong balance sheet with a net cash position of $5.2 billion, allowing for continued investment and shareholder returns. The new Gemini network has introduced greater flexibility and reliability in fleet operations, allowing for efficient capacity management and cost savings. A P Moller Maersk AS (AMKAF) revised its container market volume growth outlook to a range of minus 1% to plus 4% due to increased macroeconomic and geopolitical uncertainties. The Ocean segment experienced a continuously declining rate environment, impacting profitability despite high vessel utilization. The Fulfilled by Maersk business within Logistics & Services is still delivering negative EBITDA, requiring further measures to improve profitability. The company faces challenges from the ongoing US-China trade tensions, which have led to a 30% to 40% drop in China-US trade volumes. There is uncertainty regarding the reopening of the Red Sea, which could impact supply chain routes and operational costs. Q: How do you see the current drop in China-US trade volumes evolving, and what are customers saying about inventory positions? A: Vincent Clerc, CEO, explained that the 30-40% drop in volumes is due to customers reacting quickly by canceling or stopping orders. If a de-escalation occurs, there could be a catch-up effect with stronger demand from China. However, if the situation becomes entrenched, customers are currently drawing on inventories in the US, Canada, and Mexico, waiting to see how tariffs will affect their supply chains. Q: Can you discuss the capacity plans for the Ocean business, particularly in relation to the Gemini network? A: Vincent Clerc, CEO, stated that the increase in capacity is due to longer sailing routes around the Cape of Good Hope, requiring more tonnage. The Gemini network provides flexibility, allowing for vessel swapping to manage capacity efficiently. The company aims to maintain its scale by lifting 12.5 to 13 million FFEs annually. Q: What measures are being taken to improve the profitability of the Fulfilled by Maersk business within Logistics & Services? A: Patrick Jany, CFO, mentioned that they are addressing operational issues in Last Mile and Middle Mile in the US, stepping out of unprofitable contracts, and focusing on cost management. Improvements are expected in the coming quarters, with Warehousing already showing positive results. Q: How do you view the potential impact of repositioning capacity on freight rates, particularly in Asia-Europe trade lanes? A: Vincent Clerc, CEO, noted that capacity can be reactivated quickly if demand rebounds. While rates have been stable recently, the market's growth and capacity management will influence future rate stability. The company has observed responsible pricing behavior across the industry. Q: Given the ongoing uncertainty, does this affect your share buyback plans? A: Patrick Jany, CFO, confirmed that the share buyback program is dimensioned to maximize possibilities within market rules. The strong balance sheet allows for continued investment in business growth and share buybacks, maintaining the planned timetable. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
07-02-2025
- Business
- Yahoo
A P Moller Maersk AS (AMKAF) Q4 2024 Earnings Call Highlights: Record Financial Year and ...
Release Date: February 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. A P Moller Maersk AS (AMKAF) reported a record full-year EBITDA of $12.1 billion and EBIT of $6.5 billion for 2024, marking the best financial year outside the pandemic boom. The logistics and services segment saw a significant improvement in margins, increasing from 2.5% in the first half to 4.6% in the second half of 2024. The company's new ocean network, Gemini, is expected to enhance operational efficiency and reduce costs by approximately $500 million annually. The terminals segment achieved a return on invested capital of 13.5%, surpassing midterm targets and reflecting strong performance. A P Moller Maersk AS (AMKAF) reinstated its share buyback program, planning to return approximately $4.4 billion to shareholders, indicating strong cash flow and financial health. The company faces ongoing uncertainty regarding the potential reopening of the Red Sea, which could impact supply chain dynamics. Despite improvements, the logistics and services segment still falls short of its 10% organic revenue growth and 6% margin targets. The company anticipates a challenging supply-demand imbalance in 2025, with potential capacity increases and market disruptions. A P Moller Maersk AS (AMKAF) expects a wide range of underlying EBIT for 2025, between breakeven and $3 billion, indicating potential volatility. The company acknowledges that the progress in its integrated strategy has been slower than expected, with foundational capabilities still being developed. Warning! GuruFocus has detected 2 Warning Sign with BSBR. Q: With your largest competitor pulling ahead in terms of size, how should we think about your use of cash? Could you consider M&A in logistics and services, or doubling down on container shipping? A: (CEO) We are focused on maintaining our current position in ocean shipping as we don't see a correlation between size and increased margin. Our Gemini network is competitive and cost-effective. Regarding capital allocation, we are pleased with our decisions on dividends and share buybacks, and we plan to continue executing our strategy without major acquisitions in shipping. Q: With a utilization of 95%, what are the levers to improve unit costs further? A: (CEO) Higher utilization is maxed out, but operational efficiency through the Gemini network will create more density and better asset turns, achieving $500 million in savings. Additionally, as the situation normalizes, we expect cost reductions in areas like charter rates and procurement. Q: Can you provide some color on the integrated strategy's progress and future investment needs? A: (CEO) The foundational capabilities are in place, and we are now focused on execution. The strategy remains relevant, especially with the increasing importance of logistics. We aim to achieve a 6% EBIT margin in logistics and services, and more details will be shared at our Capital Markets Day. Q: How did the Asia-Europe contracting season go, and what are the expectations for the transpacific season? A: (CEO) Contracting has progressed well, with volumes and rate levels in line with expectations. We anticipate strong market growth in the transpacific, supported by positive customer sentiment and expected economic conditions. Q: What needs to happen for you to start reshaping your network and returning to the Red Sea and Suez transits? A: (CEO) Safety is the primary concern. We need assurance that the region is stable and safe for our operations. Additionally, we must ensure that any changes are sustainable to avoid costly disruptions. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
