Maersk raises 2024 guidance on strong demand, Red Sea disruptions

Published Tue, Jun 4, 2024 · 07:30 AM

Maersk says it expects to have a free cash flow of at least US$1 billion in 2024. PHOTO: REUTERS

DANISH shipping group AP Moeller-Maersk on Monday (Jun 3) raised its full-year profit guidance for the second time in a month on the back of strong container market demand and the crisis in the Red Sea.

Maersk now expects its underlying earnings before interest, tax, depreciation and amortisation in the range of US$7 billion to US$9 billion, up from its previous forecast of US$4 billion to US$6 billion.

The company, viewed as a barometer of world trade, said it now sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates.

The rise in container freight prices and further port congestions are expected to contribute to a stronger financial performance in the second half of 2024, Maersk said.

Maersk had raised its full-year profit guidance last month when it reported first-quarter earnings, citing strong demand and higher freight rates as ships sailed longer to avoid conflict in the Red Sea.

The company said earlier on Monday that it was facing significant terminal congestion in Mediterranean and Asian ports, causing substantial delays in its vessel schedule.

Maersk says Red Sea disruption will cut capacity by 15-20% in Q2

Maersk expects full-year underlying earnings before interest, tax, depreciation and amortisation this year of between US$4 billion and US$6 billion, compared with previous guidance between US$1 billion and US$6 billion.

Maersk raises full-year profit guidance after strong quarter

Maersk is demerging the unit, the world’s largest operator of tugboats, as the Copenhagen-based company pursues a strategy to focus on container transport, both at sea and on land.

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“Know your best alternative to entering the North American market and be ready to have mitigations in place,” Maersk’s head of North America, Charles van der Steene, said in a statement.

Maersk says Red Sea disruptions could last into second half of 2024

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Maersk also said it expects to have a free cash flow of at least US$1 billion in 2024. It upgraded its earnings before interest and tax to a range between US$1 billion and US$3 billion, from its previous forecast of a loss of US$2 billion to US$0 billion. REUTERS

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