Danish shipping group AP Moeller-Maersk on Monday raised its full-year profit guidance for the second time in a month on the back of strong container market demand and the crisis in the Red Sea.
Maersk now expects its underlying earnings before interest, tax, depreciation and amortisation in the range of $7 billion to $9 billion, up from its previous forecast of $4 billion to $6 billion.
The company, viewed as a barometer of world trade, said it now sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates.
The rise in container freight prices and further port congestions are expected to contribute to a stronger financial performance in the second half of 2024, Maersk said.
Maersk had raised its full-year profit guidance last month when it reported first-quarter earnings, citing strong demand and higher freight rates as ships sailed longer to avoid conflict in the Red Sea.
The company earlier on Monday said that it was facing significant terminal congestion in Mediterranean and Asian ports, causing substantial delays in its vessel schedule.
Maersk also said it expects to have a free cash flow of at least $1 billion in 2024. It upgraded its earnings before interest and tax (EBIT) to a range between $1 billion and $3 billion, from its previous forecast of a loss of $2 billion to $0 billion.
(Reuters - Reporting by Shivani Tanna in Bengaluru; Editing by Maju Samuel)