SIMIC

Earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 44 per cent to $8.2 billion for the year.

Full-year volume declined 5.2 per cent year over year to 12.6 million FEU, but average freight rates for 2020 increased 7.35 per cent to $2,000, with rates on the east-west trades up 12.3 per cent compared with 2019, reports IHS Media.

Maersk has forecast volume growth of 3 to 5 per cent in 2021, with the highest growth occurring in the first half, and expects container shortages and supply chain bottlenecks to continue at least through the first quarter.

With these factors in mind, the carrier noted in its financial guidance for 2021 that it expects EBITDA to be $8.5 to $10.5 billion for the full year. The carrier has also set aside $4.5 to $5.5 billion for capital expenditures in 2021 and 2022.

Revenue in the ocean segment in 2020 was up by 1 per cent to $29 billion, but logistics and services revenue jumped 9.5 per cent to $6.9 billion, although terminals and towage revenue fell 3.7 per cent to $3.8 billion. But the growth levels were significant in the fourth quarter, when ocean revenue was up 16 per cent, while logistics and services revenue rose 35 per cent, and terminals revenue was up 8.8 per cent.

Maersk CEO Soren Skou said on the carrier's earnings call: "We would like to create a business where we have around 50 per cent of our earnings from our ocean business, and another 50 per cent of our business from our logistics and terminals business at the EBITDA level."

Maersk noted in its 2020 annual report that in 2021, the carrier will continue to focus on growing the landside logistics, expanding its product portfolio and increasing cross-selling and upselling to customers, with the aim of driving profitable organic growth.

"We have a tremendous opportunity to grow our logistics business and that is why it features so heavily in our strategy. That is where we want to

create the growth engine," Mr Skou said. "We will have to demonstrate organic growth, which we did with 22 per cent growth in the fourth quarter. We will also have to do more acquisitions, because there are some products that we need to have in some geographies."

Some of Maersk's fourth-quarter growth figures are stunning. Fourth-quarter EBITDA in the ocean segment was up 96 per cent year over year at $8.2 billion, almost $1 billion more than recorded in the last quarter of 2019. Lower bunker prices were a significant contributor to this operating result, but so were freight rates that, at an average of $2,192 per FEU, were almost 18 per cent higher than in the fourth quarter of the previous year.