AMKAF - A.P. Møller - Mærsk A/S (AMKBY) Q1 2024 Earnings Call Transcript
2024-05-02 19:59:07 ET
A.P. Møller - Mærsk A/S (AMKBY)
Q1 2024 Results Conference Call
May 02, 2024 5:00 AM ET
Company Participants
Vincent Clerc - CEO & Member of Management Board
Patrick Jany - Executive VP, CFO & Member of Executive Board
Conference Call Participants
Lars Heindorff - Nordea
Patrick Creuset - Goldman Sachs
Omar Nokta - Jefferies
Muneeba Kayani - Bank of America
Dan Togo Jensen - Carnegie
Cedar Ekblom - Morgan Stanley
Marc Zeck - Stifel
Presentation
Vincent Clerc
Welcome, everyone, and thank you for joining us on this earnings call today as we present our first quarter results for 2024. My name is Vincent Clerc, I'm the CEO of A.P. Moller, and with me in the room today is our CFO, Patrick Jany.
Yes, we can move straight to the slide. The first quarter 2024 played out as we expected. With an EBIT of $177 million, we deliver a strong sequential recovery in earnings. Our 3 main business segments of Ocean, Logistics & Services and Terminals all saw year-on-year volume growth with a demand that has stabilized.
In our Ocean business, we saw strong market demand towards the upper end volumes of our volumes outlook of 2.4% to 4.5%. While on the supply side, the Red Sea disruptions has persisted for the entire quarter and counting, leading to under supply as vessels sailed longer routes. These 2 factors have led to higher rates. We have reconfigured now our network to tackle the disruption and keep our offered capacity intact to our customers. Costs have inevitably risen due to the reroutings, but we have not steered away from our unrelenting focus on cost management to build greater resilience in this business.
In the Logistics & Services, we continue our journey towards raising margins and renewing the business with growth. We saw volume growth across the board in all product families. Margins are still under pressure, challenged by implementing in recent contracts wins in Ground Freight, also known as middle mile in North America, and continued white space in Warehousing. Nevertheless, in both cases, we know exactly what the problem is and what to do. We just need to get on with our work and deliver better results in the coming quarters.
Our Terminal business went from strength-to-strength from the new baseline set in 2023. We saw another good quarter with strong performance while the business continued to invest in growth in the form of further expansion and automation throughout our gateway portfolios. On the back of a strong container market and the Red Sea disruptions likely to remain well into the second half of this year, we raised the lower end of our financial guidance, which I will get back to later on the call.
Before we look at the segment more close, let me say that we have had a positive start to the year as we continue to focus on profitable growth and strong cost discipline. Specifically, in Logistics & Services, we saw strong volumes across all product families, with 2 of our 3 service models managed by Maersk and transported by Maersk contributing as expected financially....
A.P. Møller - Mærsk A/S (AMKBY) Q1 2024 Earnings Call Transcript