Maersk Air Cargo A/S

Management's review

Management’s Review Development in activities and financial position The Company's income statement for the year ending 31 December 2023 showed a loss after tax of USD 29,728k, and the Company's balance sheet on 31 December 2023 showed equity of USD 70,623k. The re- sult for 2023 is heavily impacted from very low freight-rates in the airfreight market as a consequence of the increased activity within the passenger market, with passenger airline offering low cost freight capac- ity in lower deck, and by initial investments in the new activities. The result for 2023 is unsatisfactory. Target and expectation for the year ahead The company expect a result for 2024 of USD 5 – 10 million. The expected result is based on freight rates will increase during the autumn and winter as normally is seen in the airfreight market. Capital resources In connection with the Board of Directors and Management’s assessment of the assumption of going con- cern which forms the basis of the preparation of the Annual Report of Maersk Air Cargo A/S for 2023, the Maersk Group have confirmed that they will support Maersk Air Cargo A/S to the extent necessary to fi- nance the Company’s operating activities and to settle its financial obligations as they fall due until the date of publishing of the Annual Report for 2024. Based on this, the Annual Report of Maersk Air Cargo A/S is prepared on the assumption of going concern. Special risks – Operating risks and financial risks Operating risks The Company’s main activity is performance of air transport for UPS, and the key to the continued suc- cess remains to continue serving UPS under this contract. We have contracts in place with AerCap sup- porting continued availability of aircraft throughout the extended contract period. In addition, the Com- pany must maintain and develop the activities performed on behalf of the Maersk Group. Foreign exchange risks The Company's income currencies are USD and EUR. Generally, income and expenses in currencies other than USD are balanced, thus, there are minimal currency fluctuation risks for the Company. The Compa- ny's balance sheet items denominated in currencies other than USD primarily comprise DKK and EUR deposits used to counter currency risks related to payment of salaries and other costs within Europe, which are primarily paid in DKK and EUR. Overall, the Company is thus only subject to minor risks asso- ciated with fluctuations in the DKK and EUR exchange rates, as foreign currency translation adjustments of the EUR deposit (net financials) in all material respects are counterbalanced by either higher or lower costs. Management regularly assesses the extent to which risks should be hedged, for example through sale of EUR. Subsequent events No significant events have occurred subsequently to the balance sheet date, which would have a material impact on the financial position of the Company.

Description of significant activities of entity

Primary Activities In 2023, the main activity of Maersk Air Cargo A/S was the operation of 17 B767’s, of which 12 are oper- ated on behalf of the global courier company United Parcel Service (UPS) under a long-term agreement, and 1 operated on contracts on behalf of the global courier company DHL. In addition to this, several ad hoc cargo charter flights as well as series flights were performed. In March 2023, Maersk Air Cargo A/S commenced scheduled traffic between Billund and Hangzhou in China, initially 1 B767, increasing to 4 B767 during 2023. The operation is performed on behalf of the Maersk Group. For the UPS operation Maersk Air Cargo A/S operates with high reliability, safety, and flexibility. In 2023, Maersk Air Cargo A/S achieved that 99.2% (99.2% in 2022) of the total number of flights of 10,483 (10,492 in 2022) departed within one minute of scheduled time of departure.