AMKBY AP Moller Maersk AS (PK)

By Dominic Chopping

A.P. Moeller-Maersk AS late Monday lifted its full-year guidance and announced strong preliminary second-quarter earnings after seeing a continued rebound in demand and surging freight rates.

The Danish shipping giant has seen supply chain bottlenecks and shortages of equipment as retailers restock inventory that was depleted early last year and as consumer spending recovers, sending freight rates 59% higher in the quarter compared with last year while shipping volumes increased 15%.

Maersk, the world's largest container-ship operator and considered a barometer of global trade, said the exceptional market situation is expected to continue at least until the end of 2021. It now sees global market demand growth for 2021 at 6%-8% from 5%-7% previously, primarily driven by export volumes out of China to the U.S.

The company reports second-quarter earnings on Aug. 6, but said Monday that revenue in the quarter reached $14.2 billion, underlying earnings before interest, tax, depreciation and amortization reached $5.1 billion and underlying earnings before interest and tax was $4.1 billion.

Earnings in the third quarter are expected to exceed the level for the second quarter, but it cautioned that trading conditions ahead are subject to higher-than-normal volatility due to the temporary nature of current demand patterns, disruptions in the supply chains and equipment shortages.

Full-year underlying Ebitda is now expected at between $18 billion and $19.5 billion, from $13 billion-$15 billion previously, and underlying EBIT is seen at $14 billion-$15.5 billion from $9 billion-$11 billion previously.

Free cash flow for 2021 is now expected to be at least $11.5 billion from a minimum of $7 billion previously, while the cumulative capital expenditure guidance for 2021-22 is unchanged of around $7 billion, it said.

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

(END) Dow Jones Newswires

August 03, 2021 02:16 ET (06:16 GMT)

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