Shipping Group Maersk Expects High Demand, Bottlenecks To Last Until End 2021
Maersk said on Wednesday it expects an "exceptionally strong" performance in the first quarter to continue for the rest of the year, driven by high demand for shipping containers from China to the Uni...
Maersk said on Wednesday it expects an "exceptionally strong" performance in the first quarter to continue for the rest of the year, driven by high demand for shipping containers from China to the United States.
"Strong demand led to bottlenecks as well as lack of capacity and equipment which drove up freight rates to record high levels," Chief Executive Soren Skou said in a statement.
Those factors prompted Maersk last week to raise its outlook for full-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $13-15 billion from $8.5-10.5 billion.
It also lifted its forecast for global container demand growth to 5-7% from 3-5%.
"We now expect the current dynamics to last into the fourth quarter," Skou said.
Large retailers and producers, including Puma and Signify, have said congestion at ports, container shortages and continued delays at the Suez Canal were causing problems getting products made in Asia to key markets.
"The pandemic continues to impact the industry with a temporary economic upside coupled with significant operational challenges," Skou said.
Maersk, the world's biggest container shipping line, confirmed the 30% rise in first-quarter revenue announced in a preliminary trading statement last week and reiterated its upbeat profit outlook for 2021.
The company said EBITDA more than doubled in the period to $4.0 billion, in line with preliminary numbers published last week.
Maersk also said high free cash flow had prompted it to speed up an existing $1.6 billion share buyback programme and launch a new $5 billion share buyback programme that will conclude in 2023.