Maersk Lifts Guidance as Supply Chain Bottlenecks Send Freight Rates Surging
August 03 2021 - 2:20AM
Dow Jones News
By Dominic Chopping
A.P. Moeller-Maersk AS late Monday lifted its full-year guidance
and announced strong preliminary second-quarter earnings after
seeing a continued rebound in demand and surging freight rates.
The Danish shipping giant has seen supply chain bottlenecks and
shortages of equipment as retailers restock inventory that was
depleted early last year and as consumer spending recovers, sending
freight rates 59% higher in the quarter compared with last year
while shipping volumes increased 15%.
Maersk, the world's largest container-ship operator and
considered a barometer of global trade, said the exceptional market
situation is expected to continue at least until the end of 2021.
It now sees global market demand growth for 2021 at 6%-8% from
5%-7% previously, primarily driven by export volumes out of China
to the U.S.
The company reports second-quarter earnings on Aug. 6, but said
Monday that revenue in the quarter reached $14.2 billion,
underlying earnings before interest, tax, depreciation and
amortization reached $5.1 billion and underlying earnings before
interest and tax was $4.1 billion.
Earnings in the third quarter are expected to exceed the level
for the second quarter, but it cautioned that trading conditions
ahead are subject to higher-than-normal volatility due to the
temporary nature of current demand patterns, disruptions in the
supply chains and equipment shortages.
Full-year underlying Ebitda is now expected at between $18
billion and $19.5 billion, from $13 billion-$15 billion previously,
and underlying EBIT is seen at $14 billion-$15.5 billion from $9
billion-$11 billion previously.
Free cash flow for 2021 is now expected to be at least $11.5
billion from a minimum of $7 billion previously, while the
cumulative capital expenditure guidance for 2021-22 is unchanged of
around $7 billion, it said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
August 03, 2021 02:16 ET (06:16 GMT)
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