AMKBY AP Moller Maersk AS (PK)

By Dominic Chopping

A.P. Moeller-Maersk AS said Wednesday that it saw surging demand in the fourth quarter while freight rates spiked due to bottlenecks across the entire supply chain, including a shortage of ships and containers.

As a result, the first quarter of 2021 is expected to be stronger than the fourth quarter of 2020, the company said.

The Danish shipping giant posted a quarterly net profit attributable to shareholders of $1.3 billion, compared with a loss of $72 million a year earlier, and against the $1.39 billion seen in an analyst forecast from FactSet.

Revenue rose 16% to $11.26 billion against $10.91 billion expected.

Maersk, which is considered a barometer of global trade, said shipping volumes rose 3.2% and average freight rates surged 18%, while fuel costs fell 14% on the year.

"Ocean performed at record level in the quarter as a consequence of the strong rebound of demand which led to full capacity utilization but also to bottlenecks, higher costs and difficulties in meeting our customer reliability promises," said Chief Executive Soren Skou.

Organic volume growth in its main ocean unit is expected to be in line with global container demand at an expected 3%-5% in 2021, with the highest growth seen in the first-half of the year.

Maersk expects underlying earnings before interest, tax, depreciation and amortization in 2021 at between $8.5 billion-$10.5 billion from $8.3 billion in 2020, with underlying EBIT of $4.3 billion-$6.3 billion from $4.2 billion in 2020 and free cash flow above $3.5 billion versus $4.2 billion in 2020.

For 2021-22, accumulated capital expenditure is still expected at $4.5 billion-$5.5 billion.

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

(END) Dow Jones Newswires

February 10, 2021 03:03 ET (08:03 GMT)

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