Maersk Upgrades 2022 Guidance as Freight Rates Stay Elevated, But Headwinds Building on the Horizon

A.P. Moller-Maersk, owner of the world’s second largest container shipping line, has upgraded its full year 2022 guidance, forecasting this year to be “stronger than previously anticipated.”

But even with 2022 forecasted to come in ahead of 2021’s record results, some headwinds could be on the horizon as Maersk is now calling for flat or even slightly negative growth in global container demand.

According to Maersk’s latest trading update, underlying full year EBITDA is now expected to be around $30 billion, up from around $24 billion it had called for previously. If realized, EBITDA this year will be around 20% higher than Maersk’s record-setting 2021, as high freight rates and disruptions continue to impact global supply chains.

Underlying EBIT for 2022 is expected to come in around $24 billion, up from around $19 billion previously, and free cash flow is expected above $19 billion, about $4 billion more than its previous guidance and $2.5 billion ahead of the $16.5 billion free cash flow Maersk saw in 2021.

The company announced Tuesday that first quarter results came in ahead of forecasts, with revenues of $19.3 billion, an underlying EBITDA of $9.2 billion, and an underlying EBIT of $7.9 billion.

The strong result was “driven by the continuation of the exceptional market situation within Ocean, which has led to a 7% decline in volumes and an average 71% increase in freight rates compared to Q1 2021,” the company said.

Maersk said the current earnings guidance is still based on an assumption of normalization in its ocean segment early in the second half of 2022. But based on volume developments in the first quarter, it has revised downwards its outlook for global container demand growth from 2-4% to -1/+1%.

Maersk reported record earnings for 2021 with full-year EBITDA tripling to $24 billion—the highest ever for Maersk and the container shipping industry at large.

Maersk will publish its Q1 interim result on May 4, 2022.

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