Maersk lost more than US$700m from Russia but posts new record profit in Q1

AP Moller Maersk said it lost more than US$700 million in the first quarter from the war in Ukraine as the transport giant counts the cost of exiting Russia.

Maersk said Russia dragged down its earnings before interest and tax by US$718 million in the three-month period, with the main amount stemming from losses related to its terminals, according to a report on Wednesday. The Copenhagen-based company had published preliminary first-quarter earnings last month. 

Maersk, which controls about one-sixth of the world’s container trade, has stopped taking new cargo to Russia and has put the stakes it owns in ports in the country up for sale. Maersk completed its last cargo operation in a Russian port on May 2, it said on Wednesday.

Maersk said US$627 million of the Russian losses were writedowns and US$91 million were increases in operating costs. The company’s Russian assets are now valued at zero, chief executive officer Soren Skou said in an interview with Bloomberg TV’s Anna Edwards. 

“We decided to write it all down during the quarter,” Skou said. “Hopefully we will regain some of that as we divest the assets in the coming quarters.”

Maersk is “in negotiations with several parties” regarding the sales of the port stakes, the CEO said. “It is a complicated situation, there’s also sanctions and so on that we have to abide by. It will take a while, I suspect, for those talks.”

The company however posted record profits in the first quarter as container freight prices continued to soar, allowing it to again raise its 2022 outlook.

After registering record-beating profits for the full-year 2021, the group said its first-quarter net profit had more than doubled to US$6.8 billion on the back of a 55-percent jump in sales to US$19.2 billion.

The record earnings exceeded the previous quarterly high of US$6.1 billion reported in the fourth quarter of 2021, despite a US$718-million provision following its decision to stop deliveries to and from Russian ports due to the war in Ukraine.

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