A.P. Moller-Maersk A/S (APMM) sees worsening port congestion, especially in the Middle East and Asia, and further increases in container freight rates thanks to a combination of strong container market demand and disruption from the Red Sea crisis.
As a result, Maersk has significantly upgraded its full-year 2024 guidance. The company now anticipates an underlying EBITDA of US $7 to $9 billion and an EBIT of $1 to $3 billion, marking a substantial increase from the previous guidance of $4 to $6 billion and -$2 to $0 billion, respectively.
“This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024,” Maersk said in a trading update.
Moreover, the company now expects a free cash flow of at least $1 billion, a positive shift from the previously projected cash flow of at least -$2 billion.
Earlier on Monday, Maersk said it has seen significant delays in vessel schedules due to severe terminal congestion, particularly in Mediterranean and Asian ports. The congestion has resulted in extended waiting times at some ports, impacting Maersk’s ability to maintain regular schedules.
Since November, missile and drone attacks in the Red Sea and Gulf of Aden by the Yemen-based Houthis have forced services to reroute around the Cape of Good Hope. This has resulted in longer voyages and skyrocketing freight rates, despite a record number of new vessel deliveries.
Industry experts have been warning of ripple effects from the reroutings, including bottlenecks, vessel bunching, and shortages of equipment and capacity.
However, Maersk cautions that trading conditions remain volatile given the unpredictability of the Red Sea situation and unclear future supply and demand.
The company is set to publish its Q2 interim results on August 7, 2024.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 108,908 members that receive our newsletter.
Have a news tip? Let us know.
Yemen's Houthis will not "dial down" their action against Israeli shipping in the Red Sea in response to U.S. military pressure or appeals from the group's allies such as Iran, the Yemeni militant group's foreign minister said.
Crowley Maritime Corporation raised the U.S. flag today on the LNG carrier American Energy, marking a significant milestone as the first domestic vessel to transport U.S.-sourced liquefied natural gas to...
The Australian Maritime Safety Authority (AMSA) has secured a legal victory after the Gladstone Magistrates Court fined Universal Shipping Alliance Ltd AUD $63,000 for failing to comply with a safety...
Maritime and offshore news trusted by our 108,908 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
