Due to the continuously strong demand in the container market and the disruption caused by the ongoing crisis in the Red Sea, A.P. Moller - Maersk A/S (Maersk) is experiencing stagnations in ports across Asia and the Middle East. The rise in container freight rates is contributing to this situation. "This development is gradually building up and is expected to contribute to stronger financial performance in the second half of 2024," the shipping company announces.
Based on this development, Maersk is raising its expectations for the full year 2024. The Danish giant now expects an underlying EBITDA of 7 to 9 billion dollars and an EBIT of 1 to 3 billion dollars (previously 4 to 6 billion dollars and -2 to 0 billion dollars, respectively), and a free cash flow of at least 1 billion dollars (previously at least -2 billion dollars).
Photo: Dreamstime.
Entering a new phase
Vincent Clerk, CEO of Maersk: "Over the past month, the container transportation market has entered a new phase, driven by the disruptions resulting from the ongoing crisis in the Red Sea and the ripple effects on global supply chains. While the demand for container transport remains strong, the supply is negatively affected by missed sailings, longer routes, shortages of equipment, and delays, which have led to increased congestion in various key ports in Asia and the Middle East. This imbalance between demand and supply has had an immediate and profound impact on freight rates.
After a stable first quarter, price increases gained momentum in April and May across many regions. The ongoing threats to commercial vessels in the Red Sea and the increasing bottlenecks in the supply chain indicate that this situation will not improve quickly. More capacity than anticipated will be needed to address these issues and stabilize the global supply chain. This has led us to reassess the outlook for the remainder of the year and adjust our financial expectations accordingly."
More information:
A.P. Moller - Maersk A/S
www.maersk.com
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