Total utilisation across the group’s portfolio of terminals improved 9% to a level of 79% in Q2 2019.
Maersk Group reported a good performance for its “Terminals” business (APM Terminals) in Q2 2019.
A key metric for the Maersk group, and one of the driving factors behind the restructuring announced in 2016, was to improve the total utilisation rate at APM Terminals’ facilities. The company is making good progress in this regard. A 9.0 percentage point increase in utilisation lifted the total utilisaton rate to 79% year-on-year. Maersk attributed the result to “volume growth, capacity reductions in Los Angeles, USA, due to ongoing automation project, and ramp-up of Moin, Costa Rica. Volume from Ocean segment grew by 0.7% (4.1% like-for-like) and volume from external customers grew by 13.0% (7.6% like-for-like). On an equity- weighted basis, volume grew by 8.2% (6.8% like-for-like) and utilisation was 85% (77%).
Measured by volume Maersk’s Gateway terminals reported volume growth of 8.5% - "(6.4% like-for-like adjusted for new terminal in Moin, Costa Rica, and divested terminals in Izmir, Turkey, and Kobe, Japan) compared to estimated market growth of 2.5%. Volume growth was mainly driven by higher volumes in Americas, mainly in Moin, Costa Rica, Los Angeles, USA, and collaboration with Ocean segment in Port Elizabeth, USA, partially offset by lower volumes in Barcelona, Spain,” Maersk said.
Latin America recorded the biggest increase (up 28%) mainly driven by Moin, while Africa and Middle East volume grew by 5.6%. “In Europe, volumes decreased by 7.7% following the divestment of Izmir, Turkey, and lower volumes in Barcelona, Spain. Asia decreased by 8.0%, mainly driven by the exit from Kobe, Japan, and lower volumes in Yokohama, Japan”.
On the financial side, total revenue increased by 18% to US$ 791M (US $670M) and EBITDA increased by 11% to US $180M (US$ 162M). Maersk said this was mainly due to “increased storage income, cost reductions in SG&A and volume growth of 8.5%, partly offset by negative one-offs”.
Gross capital expenditure increased to US$ 77M (US$ 71M), mainly driven by equipment replacement related to the Barcelona, Spain, terminal, where APM Terminals has added new straddle carriers.
Revenue per move increased by 7.4% to US$ 257, mainly due to higher volumes in North America, where rates are higher on average, higher revenue from storage in West Africa and ramp-up of Moin, Costa Rica. Adjusting for foreign exchange rate, volume mix effects and portfolio changes, revenue per move increased by 1.3% compared to Q2 2018.
The cost per move was 4.7% higher than Q2 2018 at US$ 213 (USD 203), which Maersk said was “mainly due to higher volumes in higher cost locations in Los Angeles, USA, Port Elizabeth, USA, and Moin, Costa Rica. The benefits of several cost reduction initiatives offsets part of the inflationary labour cost in several terminals. Adjusted for foreign exchange rate impact and volume mix effects between operating terminals and from divested and newly operated terminals, cost per move decreased slightly by 0.1%”.
The EBITDA margin for gateway terminals declined by 1.4%, due to what Maersk called “one-offs”. The EBITDA margin in the Americas was up 2.6 percentage points on higher volumes, while Europe rose 2.8 percentage points despite the drop in volume. Other areas were mixed. “In Africa and Middle East, the EBITDA margin increased by 9.0 percentage points due to the higher storage revenue in the West African terminals. The EBITDA margin in Asia decreased by 3.3 percentage points, due to lower volumes in Yokohama, Japan, and exit from Kobe, Japan”.
Maersk Group is planning to scale back investment in new terminals as part of its wider strategy, but its terminals business still has a lot of major projects in the pipeline. These include ramping up at Moin, construction projects at Vado, Italy, Abidjan, Ivory Coast, and Tema, Ghana, plus the “modernisatoin” project at Pier 400 in Los Angeles.