A P Moller–Maersk has reported earnings in line with its expectations for the first quarter of 2024 amid the ongoing crisis in the Red Sea, leading it to improve its outlook for the year. 

The Danish shipping giant saw a net profit of $208m for Q1 which, while significantly lower than Q1 2023, when the company saw a profit of $2.3bn, falls in line with its expectations after strong volumes for its Ocean business were balanced by higher operating costs from the rerouting required by the attacks in the Red Sea. 

CEO Vincent Clerc said: “We 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. 

“This not only supported a recovery in the first quarter compared to the previous quarter but also provided an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.” 

According to Maersk’s earnings report, its Ocean business was the most significantly affected by the Red Sea and Gulf of Aden as it was forced to implement a new network, though the situation was somewhat positive for the company thanks to market rates increasing. 

The significant drop in profit comes despite a smaller year-on-year decrease in revenue, which went from $14.2bn in Q1 2023 to $12.4bn in Q1 2024, with the company stating that a strong performance by its terminals business had offset weakness in its logistics and services business, which it said had an unsatisfactory margin despite increased revenue. 

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Maersk said that its terminals business had seen growth in all regions, with a particular rise in volume in the US West Coast region, and was mostly unaffected by the Red Sea crisis, with only one of Maersk’s terminals in Aqaba, Jordan significantly affected. 

As a result of the strong results in some areas of the business and limited losses in others, and due to its opinion that crisis situations looked likely to remain in the second half of the year, Maersk reported that it would be upping the lower end of its 2024 outlook. 

The company revealed that its EBITDA outlook was being raised from between $1bn to $6bn to between $4bn and $6bn while its cash burn expectation was being decreased from around $5bn to around $2bn. 

The Q1 report largely continues the outlook seen in Maersk’s FY 2023 report, where the company said that despite “substantial declines” caused by a difficult market, its results were largely in line with expectations.