By Stine Jacobsen
COPENHAGEN, Aug 13 (Reuters) – Danish shipping group Maersk on Thursday smashed profit forecasts and raised its full-year earnings guidance for a second time this year as the Middle East conflict and strong demand pushed freight rates higher.
Maersk’s profit before interest, taxes, depreciation and amortisation (EBITDA) for April to June stood at $3.0 billion, against a median forecast of $2.12 billion in a company-provided poll of 11 analysts, up from $2.30 billion a year ago.
Maersk, a bellwether for global trade given its position as the world’s second-largest container shipper, in June raised its outlook on the back of strong demand, particularly in Asia, and said it expected global container market growth of around 4% this year.
The company now expects underlying EBITDA of between $10.5 billion and $12.5 billion, up from a previous $8 billion to $10 billion, and underlying operating profit between $4.5 billion and $6.5 billion, up from a previous $2 billion to $4 billion.
The shipping giant has seen rising profits from turbulence in global trade that pushed up freight rates, including the U.S.-Iran war, which disrupted traffic through the Strait of Hormuz, and Houthi attacks in the Red Sea.
Some analysts have cautioned the recent strength in the freight market is a short-term tailwind masking bigger risks ahead, and that any normalisation of Red Sea traffic would put significant downward pressure on freight rates.
The Asia-Europe trade corridor through the Suez Canal was abandoned by most shippers earlier this decade after attacks in the Red Sea by Yemen’s Houthis, forcing ships to sail around Africa’s Cape of Good Hope.
The longer journeys around Africa drove up shipping rates, making freight more expensive, but Maersk and Hapag-Lloyd in recent months announced that they would resume some services through the Suez Canal as part of a gradual return.
(Reporting by Stine Jacobsen, editing by Terje Solsvik)
