A.P. Møller – Maersk has again upgraded its full-year forecast for 2021 to reflect strong second-quarter results and “an exceptional market situation,” the company said in a trading update.
Maersk on Monday reported preliminary unaudited second-quarter revenue of $14.2 billion, underlying EBITDA of $5.1 billion and underlying EBIT of $4.1 billion in the quarter. Volumes in the company’s marine segment increased 15% and average freight rates improved 59% in Q2 2021 compared to the prior year.
“The strong quarterly performance is mainly driven by the continuation of the exceptional market situation with a strong upturn in demand leading to bottlenecks in supply chains and equipment shortages,” the company said in the trading update.
Maersk noted that the market situation is expected to continue at least until the end of the year, which has prompted the company to upgrade its full-year EBITDA forecast to $18-19.5 billion from the previous forecast of $13-15 billion it had called for in April. Underlying EBIT is now expected between $14 billion and $15.5 billion, up from $9 billion and $11 billion previously.
“As a consequence of higher earnings expectations, and despite higher net working capital and higher fees related to increased charter hire liabilities, free cash flow (FCF) for the full year 2021 is now expected to be minimum $11.5 billion (previously minimum $7 billion), while cumulative CAPEX guidance for 2021-22 remains unchanged at around $7 billion,” Maersk’s trading update said.
“Global market demand growth outlook for the full year 2021 has been revised upwards to 6-8% from 5-7% previously, mainly driven by export volumes from China to the U.S.,” the update said.
According to Maersk, Q3 earnings are now “expected to exceed the level of Q2 2021,” although they are still subject to “higher than normal volatility” due to the temporary nature of current demand patterns, supply chain disruptions and equipment shortages.
A.P. Møller – Maersk will publish its second quarter interim results on August 6, 2021.