Maersk Upgrades Guidance Amid Surging Demand and Freight Rates
April 27 2021 - 2:22AM
Dow Jones News
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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