Weaker ocean rates hit Maersk Q1 profit

First-quarter profits declined from a year ago, Maersk said, as increased container volumes failed to overcome pressured ocean rates.

The world’s second-largest box carrier (OTC: AMKBY) said that logistics and terminal revenue partially offset weaker liner results. Earnings before interest, taxes, depreciation and amortization (EBITDA) slipped to $1.8 billion from $2.7 billion, while operating earnings (EBIT) was $340 million, down from $1.3 billion from the year-ago quarter. EBIT margin slid to 2.6% from 9.4%.

Geopolitics, demand uncertainty and over-capacity muted rates on benchmark east-west routes in the first quarter. The Iran conflict and rising fuel costs have lifted box prices in more recent weeks.    

“We’ve seen strong demand across most regions this quarter, supporting robust volume growth in our three business segments,” said Vincent Clerc, chief executive, in a release. ” Officer at Maersk.. “In Ocean in particular, market volatility remains high and industry oversupply continues to put pressure on rates. In this environment our disciplined focus on cost management contributes to resilient performance.”