Danish container logistics major AP Moller - Maersk reported Thursday that its first-quarter net income group share plunged to $177 million from last year's $2.28 billion, and adjusted its outlook.
Earnings per share were $11, down from $131 a year ago. Underlying profit was $210 million for the quarter, compared to prior year's $2.56 billion.
Profit before financial items or EBIT declined to $177 million from last year's $2.33 billion.
Profit before depreciation, amortisation and impairment losses, etc. or EBITDA was $1.59 billion, down from last year's $3.97 billion.
Underlying EBITDA was $1.60 billion, compared to $4.04 billion a year ago. Underlying EBITDA margin was 12.9%, down from prior year's 28.4%.
Revenue for the quarter declined to $12.36 billion from last year's $14.21 billion, mainly due to weakness in Ocean.
AP Moller - Maersk's results for the quarter were marked by increasing volumes while rates continued to be under pressure versus previous year.
CEO of AP Møller - Mærsk, Vincent Clerc, said, "We have had a positive start to the year with a first quarter developing precisely as we expected. Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched."
Looking ahead, AP Moller - Maersk raised the lower end of its financial guidance with an underlying EBITDA in the range of $4 billion to $6 billion, compared to previously expected $1 billion to $6 billion.
The company said the strong container market and the Red Sea/Gulf of Aden disruption is likely to remain into the second half of the year.
Underlying EBIT is now expected in the range of negative $2 billion to $0.0 billion, while previous outlook was negative $5 billion to $0.0 billion.
The company noted that with the Red Sea crisis still ongoing, plans are made for the current rerouting south of the Cape of Good Hope to be extended potentially for the remainder of the year, while AP Moller - Maersk still expects overcapacity to prevail which implies lower rates during the second half.