Maersk doubles full-year EBIT outlook to about US$9b to $11b
DANISH shipping giant Maersk says it expects its full-year 2021 earnings to be double its previous guidance, citing continued strong demand for ocean shipping and freight rates that are 35 per cent higher than a year ago, reports IHS Media
28 April 2021 - 19:00
Maersk now projects full-year earnings before interest and taxes (EBIT) to be in the range of US$9 billion to $11 billion, up from earlier guidance of $4.3 billion to $6.3 billion. Last year, Maersk reported full-year EBIT of $4.5 billion.
The company's free cash flow projection for 2021 also doubled to $7 billion from an earlier projection of $3.5 billion.
The shipping carrier credited the strong trans-Pacific market for the raised guidance, adding that global demand growth could rise 5 per cent to 7 per cent this year, 200 basis points higher than its original forecast, 'primarily driven by the export volumes out of China to the US'.
The new projections come as the ocean carrier released preliminary first quarter results. It said first quarter 2021 revenue would hit $12.5 billion, 30 per cent higher than a year ago. EBIT for the first quarter is expected to reach $3.1 billion, a nearly five-fold increase from a year earlier.
Maersk said ocean shipping volumes in the first quarter of 2021 were 5.7 per cent higher than the 3.05 million FEU it moved a year ago. Freight rates for the first quarter of 2021 were up 35 per cent from $1,967.
'The continued strong performance is mainly driven by the continuation of the exceptional market situation with surging demand leading to bottlenecks in the supply chain and equipment (containers) shortage,' Maersk said in a statement.
Maersk also boosted its capital spending outlook for the year from around $5 billion to $7 billion. It said the increased spending would go toward 'additional containers to relieve the current bottlenecks and improve service reliability' in its ocean segment.
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