The world's biggest container shipping company, A.P. Moller-Maersk, on Monday lifted its full-year earnings outlook after reporting strong preliminary quarterly results as chaotic conditions in the global supply chain pushed freight rates higher.
In the wake of the coronavirus pandemic, shortages of container ships and logjams at ports around the world combined with high consumer demand for material goods have caused freight rates to skyrocket to record levels.
"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 in a statement.
Maersk, which handles one in five containers shipped worldwide, expects the global market to continue growing for the remainder of the year, and now forecasts full-year demand growth of 6-8%, revised up from 5-7%, primarily driven by exports from China to the United States.
This would also result in third-quarter earnings exceeding the second quarter's, the company said, but warned of demand volatility.
Maersk now expects full-year underlying earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $18-19.5 billion, up from a previous estimate of between $13-15 billion.
It said volumes in its Ocean division, it's biggest, increased by 15% in the second quarter from a year earlier, while average freight rates jumped 59%.
The company, set to publish full second-quarter earnings on Aug. 6, also reported preliminary second-quarter revenue of $14.2 billion and underlying EBITDA of $5.1 billion.
(Reporting by Nikolaj Skydsgaard and Stine Jacobsen; Editing by Susan Fenton)