Maersk said its earnings before interest, tax, depreciation and amortisation (EBITDA) would be in the range of US$4-6Bn (source: Maersk)
Rates and bottom lines have been boosted as operators take longer routes to avoid violent attacks on commercial vessels in the Red Sea
Announcing its first quarter 2024 results, Danish container shipping line Maersk said it has lifted its earnings guidance for the full year by US$3Bn at the lower end of its range of potential fiscal outcomes.
With earnings before interest and tax (EBIT) deductions projected to land between -US$2Bn and break-even and free cash flow expected to be -US$2Bn for the year, Maersk said its earnings before interest, tax, depreciation and amortisation (EBITDA) would be in the range of US$4-6Bn.
“The lower end of the original financial guidance is raised based on a strong market demand with container volume growth towards the upper end of the 2.5-4.5% range and AP Moller-Maersk growing in line with the market,” the company said.
Maersk said it expected the ongoing attacks against shipping in the Red Sea and Gulf of Aden to continue into the second half of the year.
The situation in the Red Sea region has increased market rates and costs due to vessels rerouteing around Africa’s Cape of Good Hope.
Maersk chief executive Vincent Clerc said the shadow of an over-supply of tonnage is looming for the box shipping segment.
“We still anticipate the high number of new vessels being delivered during this and next year to eventually offset these [improved earning] factors and put the ocean markets under renewed pressure. We therefore relentlessly continue to pursue our cost agenda with the aim of rolling back the disruption-linked cost,” he said.
Japanese container shipping consortium Ocean Network Express also released its quarterly earnings and a financial outlook echoing Maersk’s.
“The short-term freight rate market continued to decline due to sluggish cargo movements and pressure from the supply side as new vessel deliveries continued. However, freight rates rose due to geopolitical uncertainty surrounding the situation in the Middle East in Q4. For the full year forecast for FY2024, profit is expected to be around US$1Bn, a slight increase from the previous year, as the current economic and geopolitical environment are expected to continue for the time being,” ONE said.
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