Maersk Lifts Guidance as Red Sea Disruption and Strong Demand Continue

By Dominic Chopping

A.P. Moeller-Maersk raised its full-year guidance for the third time in as many months as disruptions in the Red Sea and strong container shipping demand continue.

Container operators have been forced to send their vessels on longer routes around southern Africa's Cape of Good Hope to avoid the Red Sea after Houthi rebels began attacking commercial vessels at the end of last year, creating a shortage of vessels and port bottlenecks while inflating freight rates.

The Danish shipping giant said it now expects supply-chain disruption caused by the situation in the Red Sea to continue at least until the end of 2024. Container market demand remains robust, though Maersk acknowledged that supply and demand visibility into the fourth quarter is unclear and the Red Sea situation unpredictable.

It now expects underlying earnings before interest, tax, depreciation and amortization of between $9 billion and $11 billion this year, from $7 billion to $9 billion previously. Underlying earnings before interest and tax is now seen at $3 billion to $5 billion from $1 billion to $3 billion previously.

Free cash flow is expected to reach at least $2 billion, up from previous guidance of at least $1 billion.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

August 01, 2024 08:18 ET (12:18 GMT)

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