Maersk Line has raised its full-year financial guidance, expecting a robust performance for the second half of 2024.
The Copenhagen-based shipping line on Monday (3 June) cited factors such as the ongoing Red Sea crisis, port congestion in Asia and the Middle East, and an additional increase in container freight rates..
Adjusting expectations as a result of these developments, Maersk declared it expects an EBITDA of US$7 billion to $9 billion, compared to the previous expectation of US$4 billion to $6 billion, and an expected free cash flow of at least US$1 billion, previously projected at US$ -2 to $0 billion.
Maersk CEO Vincent Clerc said: “In the past month, the container transport market has entered a new phase driven by the disruptions from the ongoing crisis in the Red Sea and the ripple effects on global supply chains.
“While demand for container transport remains strong, supply has been negatively impacted by missed sailings, longer routes, equipment shortages, and delays leading to increased congestion across several key ports in Asia and the Middle East. This demand and supply imbalance has had an immediate and profound impact on freight rates,” he said.
Maersk says trading conditions remain subject to higher-than-normal volatility due to the unpredictability of the Red Sea situation and the lack of clarity for future supply and demand.
“After a stable first quarter, price increases gained momentum during April and May across many regions. The ongoing threats to commercial vessels in the Red Sea and growing supply chain bottlenecks indicate that this situation won’t improve soon. More capacity than expected will be needed to resolve these issues and stabilize the global supply chain,” Mr Clerc said.
The Red Sea crisis began in October 2023 and shows no signs of letting up. The dangerous conditions in the region have caused many shipping lines to divert to longer routes.
Maersk will publish its second quarter results in early August.
