Maersk says shipping boom will stabilise in H2, revises up profit guidance

SHIPPING group Maersk , often seen as a barometer for global trade, on Tuesday (Apr 26) cautioned the container market may normalise in the second half of the year, even as it raised full-year guidance driven by high container freight rates.

The shipping industry has seen record profits in recent quarters as a surge in consumer demand, pandemic-related bottlenecks in US and Chinese ports and more recently an airspace closure following Russia's invasion of Ukraine prompted a spike in freight rates.

But the forecast from Maersk, one of the world's biggest container shippers with a market share of around 17 per cent, according to intelligence provider Alphaliner, is likely to be seen as a negative sign for the global economy.

Maersk said in a trading update on Tuesday that container volumes declined 7 per cent between January and March. The company now expects growth in global container demand to slow this year to between minus 1 per cent and plus 1 per cent, compared to its previous expectation of 2-4 per cent growth.

Swiss logistics group Kuehne & Nagel on Tuesday also reported a dip in container volumes in the first 3 months of the year.

Maersk revised its guidance for the full year upwards, with underlying earnings before interest, tax, depreciation and amortisation (Ebitda) expected to be about US$30 billion compared to US$24 billion previously expected and US$28.7 billion forecast by analysts in a poll gathered by the company.

The guidance was based on an "assumption of normalisation in ocean shipping early in the second half of 2022", it said.

Shares in Maersk traded as much as 8.3 per cent higher at opening and were 6.3 per cent up at 0800 GMT. Shares have lost around one-fifth of their value since an all-time high in January.

"I still expect investors to be cautious due to the risk of a US recession in 2023," said Nordnet analyst Per Hansen.

Maersk reported revenue in the first 3 months of the year at US$19.3 billion, with underlying Ebitda at US$9.2 billion, higher than analyst expectations of US$19.0 billion and US$8.4 billion, respectively.

The results were driven by container freight rates that rose by an average 71 per cent in the first quarter compared to a year earlier, the company said.

"The strong result is driven by the continuation of the exceptional market situation within ocean (shipping)," Maersk said in a trading statement.

Maersk is due to publish full first-quarter results on May 4. REUTERS