Maersk lifts guidance again as freight costs continue to rise
A.P. Moller - Maersk AS
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09:49 21/11/24
Danish shipping giant Maersk has raised its full-year profits targets by the second time in five weeks as container freight costs continue to rise as a result of the ongoing crisis in the Red Sea.
On 2 May, the company lifted its forecast for underlying earnings before interest and tax (EBIT), guiding to range of breakeven to a loss of up to $2.0bn, from previous projections of a loss of up to $5.0bn. This has now been lifted to a positive range of $1bn to $3bn.
The forecast for free cash flow has also been significantly upgraded to $1bn, compared with previous guidance of -$2bn.
Chief executive Vincent Clerc said the container transport market has entered a "new phase" over the past month, driven by the disruptions in the Red Sea and the ripple effects on global supply chains.
"While demand for container transport remains strong, supply has been negatively impacted by missed sailings, longer routes, equipment shortages, and delays leading to increased congestion across several key ports in Asia and the Middle East. This demand and supply imbalance has had an immediate and profound impact on freight rates," he said.
He predicted that the situation "won't improve soon", with ongoing threats to commercial vessels lead to growing bottlenecks in the global supply chain.
"More capacity than expected will be needed to resolve these issues and stabilize the global supply chain. This has led us to reassess the outlook for the remainder of the year and upgrade our financial guidance."
Shares of AP Moeller-Maersk were broadly flat by 1300 in Copenhagen at kr11,770.