Jacob Grönholt-Pedersen
COPENHAGEN (Reuters) – Shipping group Maersk raised its full-year profit forecast after posting better-than-expected quarterly earnings on Thursday, citing strong demand for container shipping and the rerouting of ships around Africa to avoid the Red Sea.
The Copenhagen-based company, considered a barometer of global trade, said growth in demand for shipping container shipping was at the high end of its expected range of 2.5% to 4.5% this year.
Maersk and its rivals have been steering ships around Africa since December to avoid attacks by Houthi militants on ships in the Red Sea, pushing up freight rates due to longer sailing times.
“This not only contributed to the economic recovery in the first quarter compared to the previous quarter, but also provided improved forecasts for the coming quarters. We now expect these conditions to remain with us for most of the year,” CEO Vincent Clerc said in the report. statement.
In February, Maersk warned that a wave of new container ships entering the market this year and next would lead to excess capacity and pressure on profits.
Spot freight rates tripled to nearly $3,500 per container at the start of the year but have since fallen to about $2,400.
“We continue to expect large numbers of new ships to be delivered this year and next to eventually offset these factors and put ocean markets under new pressure,” Clerk said.
Bernstein analysts expect the fleet to expand by 15% in 2024 and 2025, outpacing demand.
Maersk said it now expects full-year underlying earnings before interest, taxes, depreciation and amortization (EBITDA) to be between $4 billion and $6 billion this year, up from a previous forecast of $1 billion to $6 billion.
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EBITDA in the first quarter fell to $1.59 billion from $3.97 billion a year earlier, exceeding LSEG analysts’ expectations of $1.46 billion.