Maersk Increases 2024 Earnings Forecast to USD 1-3 Billion


Maersk Increases 2024 Earnings Forecast to USD 1-3 Billion

Maersk Group, which operates the world’s second largest container line, has raised its earnings forecast for the entire year to between USD 1 billion and USD 3 billion due to rising market tension stemming from the Red Sea crisis. This revised forecast for operating earnings (EBIT) reflects growing port congestion in Asia and the Middle East, which is driving up rates.

Additionally, there is strong volume demand as shippers are advancing orders to avoid potential issues later in the year. Maersk’s liftings increased by 7.5% year-on-year in Q1. This marks a significant change from Maersk’s negative earnings guidance in February, where it ruled out the possibility of a profit and warned of potential operating losses up to -USD 5 billion.

In Q4 2023, Maersk reported a substantial -USD 920 million operating loss in container shipping, which exceeded market expectations. By May, Maersk had adjusted its forecast, predicting a maximum loss of -USD 2 billion but still not expecting positive earnings. This week’s revision indicates that the risk of losses for this year has been averted.

Maersk noted that trading conditions remain highly volatile due to the unpredictable Red Sea situation and uncertain future supply and demand. The group now predicts an EBITDA of USD 7-9 billion for 2024 (up from the previous USD 4-6 billion) and expects free cash flow of at least USD 1 billion (previously -USD 2 billion). Maersk will publish its second-quarter results on August 7.

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