Shipping Company Maersk Lifts 2019 Profit Forecast
Danish shipping company A.P. Moller-Maersk raised its expectations for 2019 profit despite headwinds from the US-China trade war.
Maersk said it expected earnings before interest, taxes, depreciation and amortisation (EBITDA) in a range of $5.4 billion (€4.8 billion) to $5.8 billion (€5.2 billion), up from its previous expectation of around $5 billion (€4.5 billion). The rest of the guidance was unchanged, it said.
In August, the company warned that the trade war between the United States and China could curb container traffic this year.
"This definitely comes as a surprise to parts of the market, which thought Maersk might have moved in the other direction," Nykredit analyst Ricky Rasmussen said.
The upgrade came "despite slower global demand growth and lower freight rates" and was driven by "strong reliability and capacity management combined with lower fuel prices" and better margins in its terminal and towage business, Maersk said.
Analysts had worried that Maersk's unit costs - the cost of moving a 40-foot container - had been rising.
"Maersk probably beats the rest of the market when it comes to profitability," Rasmussen said.
Last week, analysts at Goldman Sachs downgraded Maersk to "neutral" from "buy" as the third quarter would probably mark the last quarter of generally improving costs.
EBITDA for the third quarter stood at $1.66 billion (€1.5 billion) on revenue of $10.06 billion (€9.02 billion), Maersk also said.