Maersk upgrades 2024 guidance on strong demand
Maersk now expecting underlying EBITDA of $7-9bn and EBIT of $1-3bn (previously $4-6bn and $-2-0bn, respectively)
On the back of continued strong container market demand and the disruption caused by the ongoing crisis in the Red Sea, Danish carrier Maersk now also sees signs of further port congestion, especially in Asia and the Middle East, and additional increase in container freight rates.
"This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024," says an official release.
Based on this development, Maersk has upgraded its 2024 full-year guidance, and now expects an underlying EBITDA of $7-9 billion and EBIT of $1-3 billion (previously $4-6 billion and $-2-0 billion, respectively), and free cash flow of at least $1 billion (previously at least $-2 billion).
Maersk had reported an EBITDA decline from $3.4 billion in Q12023 to $1.5 billion in Q12024. EBIT decreased to $117 million from $2.3 billion in 2023. Revenue was at $12.4 billion compared to $14.2 billion during the same period last year.
"In the past month, the container transport market has entered a new phase driven by the disruptions from the ongoing crisis in the Red Sea and the ripple effects on global supply chains," says Vincent Clerc, CEO, Maersk. "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.
"After a stable first quarter, price increases gained momentum during April and May across many regions. The ongoing threats to commercial vessels in the Red Sea and growing supply chain bottlenecks indicate that this situation won't improve soon. More capacity than expected will be needed to resolve these issues and stabilise the global supply chain. This has led us to reassess the outlook for the remainder of the year and upgrade our financial guidance."
Maersk will publish its Q2 results on August 7, 2024.
Trading conditions remain subject to higher-than-normal volatility given the unpredictability of the Red Sea situation and the lack of clarity of future supply and demand, the update added.