AMKBY AP Moller Maersk AS (PK)

   By Dominic Chopping 
 

A.P. Moeller-Maersk AS late Monday posted preliminary first-quarter earnings and upgraded full-year guidance amid surging demand and freight rates.

Volumes in its main ocean unit increased by 5.7% in the quarter and average freight rates rose 35% compared to the same period last year, it said.

The Danish shipping giant said it expects to report first-quarter revenue of $12.4 billion, underlying earnings before interest, tax, depreciation and amortization of $4 billion and underlying earnings before tax of $3.1 billion, with the surging demand leading to bottlenecks in the supply chain and a shortage of containers.

Given the first-quarter result and the "exceptional market situation now expected to continue well into the fourth quarter of 2021," Maersk lifted full-year 2021 underlying Ebitda guidance to $13 billion-$15 billion from $8.5 billion-$10.5 billion, and underlying Ebit to $9 billion-$11 billion from $4.3 billion-$6.3 billion previously.

Free cash flow for 2021 is now expected to be at least $7 billion, from above $3.5 billion previously, while the cumulative capex guidance for 2021-22 has been raised to around $7 billion from $4.5 billion-$5.5 billion as the company expects to spend more on additional containers to relieve bottlenecks and improve service reliability.

The 2021 outlook for global market demand growth has been revised up to 5%-7% from 3%-5% previously, primarily driven by export volumes out of China to the U.S., it added.

Maersk said business conditions are subject to higher than normal volatility due to potential changes in demand patterns and disruptions in supply chains and equipment shortages impacting short-term container freight rates.

First-quarter earnings will be published on May 5.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 27, 2021 02:07 ET (06:07 GMT)

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