A.P. Moller-Maersk A/S, the world’s largest container line, on Monday raised its guidance for profit this year after freight rates soared as lockdowns amid the COVID-19 pandemic led to a surge in spending on shipped goods.
The Copenhagen-based company added almost US$5 billion to the midpoint of its operating profit forecast, it said in a statement.
Full-year earnings before interest, taxes, depreciation and amortization (EBITDA) will be US$18 billion to US$19.5 billion, up from a previous forecast of US$13 billion to US$15 billion, the statement said.
Underlying EBIT will be in a range of US$14 billion to US$15.5 billion, compared with US$9 billion to US$11 billion previously, it said.
“The strong quarterly performance is mainly driven by the continuation of the exceptional market situation with a strong rebound in demand causing bottlenecks in the supply chains and equipment shortage,” Maersk said.
Over the past year, freight rates have repeatedly reached records amid intense demand and limited supply.
On the demand side, consumers who were unable to channel savings into restaurant visits and trips abroad instead spent their money on imports.
On the supply side, already tight capacity was hit by bottlenecks that squeezed traffic in key routes.
Maersk shares rose 1.5 percent after trading started in Copenhagen yesterday, bringing its gains this year to more than 30 percent.
“Freight rates have continued their ascent, so a profit upgrade is not a surprise, but the new forecast range is higher than expected,” Sydbank A/S analyst Mikkel Emil Jensen said in a note.
Maersk, which in May said that it would buy back US$5 billion in stock, is scheduled to release its full second-quarter report on Friday.
The company on Monday provided some unaudited second-quarter figures, with revenue of US$14.2 billion, underlying EBITDA of US$5.1 billion and underlying EBIT of US$4.1 billion.
Earnings in the third quarter are expected to “exceed the level for the second quarter, the company said.
This year’s global container demand is expected to grow 6 to 8 percent, up from 5 to 7 percent it expected previously, primarily driven by export volumes out of China to the US, it said.
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