DANISH shipping giant maersk is expecting record profits this year after the world's largest container shipping group lifted its forecast for the third time as disruptions to global supply chains and a resurgence in consumer demand sent freight rates soaring, reports London's Financial Times.
Maersk, which carries about one-fifth of all seaborne freight and is thus seen as a bellwether for global trade, has benefited along with other container shipping groups from extraordinary demand this year following the end of most coronavirus lockdowns.
The Danish group said it expected its underlying operating profits to be US$18 billion to $19 billion, up from a forecast of $14 billion to $15.5 billion last month and $4.3 billion to $6.3 billion in February.
This would be the highest operating profits in the company's history, beating the previous record of about $12 billion in 2008, just before the global fiscal crisis caused earnings to tumble the following year.
Chief executive Soren Skou deflected questions about whether he was embarrassed the group was now expecting profits four times the level that was anticipated at the start of the year, saying he was 'pleased' that customers were doing so well they wanted so many goods shipped.
'There's nothing in our data that suggests the current strong demand is about to abate. Demand is driven both by very strong consumer demand for products both in the US and even in Europe, and on top of that we have this inventory rebuilding cycle going on,' Mr Skou said.
He conceded that the situation was 'clearly getting worse' in Los Angeles, a crucial port on the US west coast for trade with China and the rest of Asia. Congestion outside the port had eased to only about ten ships last month but stood at 59 ships last Wednesday, with Mr Skou blaming a lack of dock workers and truckers.
Maersk had expected a 'normalisation' of its business in the second half of this year, but Mr Skou confirmed that on current outlook there was none in sight, meaning it would be at least 2022 before conditions ease.
The chief executive said companies worldwide were trying to make their supply chains more robust. He said Maersk was doing everything it could to help customers.
Maersk updated other numbers as well, saying it expected free cash flow of at least $14.5 billion instead, up from a previous forecast of at least $11.5 billion. Underlying earnings before interest, tax, depreciation and amortisation should be $22 billionn to $23 billion, up from $18b billion to $19.5 billion.
Asked whether there could be a fourth profit upgrade during the fourth quarter, Mr Skou replied: 'I really hope this is it because it's getting a bit crazy.'
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Maersk, which carries about one-fifth of all seaborne freight and is thus seen as a bellwether for global trade, has benefited along with other container shipping groups from extraordinary demand this year following the end of most coronavirus lockdowns.
The Danish group said it expected its underlying operating profits to be US$18 billion to $19 billion, up from a forecast of $14 billion to $15.5 billion last month and $4.3 billion to $6.3 billion in February.
This would be the highest operating profits in the company's history, beating the previous record of about $12 billion in 2008, just before the global fiscal crisis caused earnings to tumble the following year.
Chief executive Soren Skou deflected questions about whether he was embarrassed the group was now expecting profits four times the level that was anticipated at the start of the year, saying he was 'pleased' that customers were doing so well they wanted so many goods shipped.
'There's nothing in our data that suggests the current strong demand is about to abate. Demand is driven both by very strong consumer demand for products both in the US and even in Europe, and on top of that we have this inventory rebuilding cycle going on,' Mr Skou said.
He conceded that the situation was 'clearly getting worse' in Los Angeles, a crucial port on the US west coast for trade with China and the rest of Asia. Congestion outside the port had eased to only about ten ships last month but stood at 59 ships last Wednesday, with Mr Skou blaming a lack of dock workers and truckers.
Maersk had expected a 'normalisation' of its business in the second half of this year, but Mr Skou confirmed that on current outlook there was none in sight, meaning it would be at least 2022 before conditions ease.
The chief executive said companies worldwide were trying to make their supply chains more robust. He said Maersk was doing everything it could to help customers.
Maersk updated other numbers as well, saying it expected free cash flow of at least $14.5 billion instead, up from a previous forecast of at least $11.5 billion. Underlying earnings before interest, tax, depreciation and amortisation should be $22 billionn to $23 billion, up from $18b billion to $19.5 billion.
Asked whether there could be a fourth profit upgrade during the fourth quarter, Mr Skou replied: 'I really hope this is it because it's getting a bit crazy.'
SeaNews Turkey