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Danish freight Maersk doubles profits with freight prices up

Danish shipping giant Maersk said Wednesday its profits doubled in the second quarter as freight prices have soared due to persistent bottlenecks on trade routes.

Published: 3 August 2022 12:03 CEST
Danish freight Maersk doubles profits with freight prices up
Signage at the Maersk offices in Copenhagen on July 30th. The shipping giant has again reported huge profits. Photo: Andrew Kelly/Reuters/Ritzau Scanpix

Demand for shipping plunged at the start of the Covid pandemic, but it has rebounded strongly since the second half of 2020, causing massive disruptions in supply chains.

Maersk, the world’s largest container shipping line along with Italy’s MSC, has posted robust profits since the second half of 2020.

Its net profit for the second quarter reached $8.6 billion, compared to $3.7 billion for the same period in 2021, up from record profits in the first quarter.

“We delivered an exceptionally strong result for the second quarter and consequently recorded the 15th quarter in a row with year-on-year earnings improvements,” Soren Skou, CEO of Maersk said in a statement.

The company’s revenue rose to $21.7 billion in the second quarter, up from $14.2 billion a year earlier.

The rise was “mainly driven by significantly higher freight rates” even as this was “slightly offset by a decrease in volumes and by higher costs related to bunker, handling and network”, Maersk said in its earnings statement.

“Landside congestion continues to be an issue around the world, with additional pressure from the Chinese lockdown,” it added, referring to China’s recent measures to contain Covid outbreaks.

On Tuesday, Maersk announced an updated guidance to its full year results, as a result of “the continuation of the exceptional market situation” within shipping.

Given the current market situation and despite withdrawing from Russia, the group said it expected earnings before interest, taxes, depreciation and amortisation of around $37 billion, up from its April forecast of $30 billion.

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BUSINESS

Maersk profits plummet as Yemeni attacks close off Red Sea route

Danish shipping giant Maersk posted a huge drop in net profit for the first quarter on Thursday as Yemeni rebel attacks are forcing it to avoid the vital Red Sea route.

Published: 2 May 2024 10:06 CEST
Maersk profits plummet as Yemeni attacks close off Red Sea route

Maersk reported a net profit of $177 million in the first three months of the year, a 13-fold drop from the same period last year. Turnover fell 13 percent to $12.4 billion, slightly lower than forecast by analysts surveyed by financial data firm FactSet.

The company, however, raised its outlook for the full year, citing higher demand and increased rates and costs due to the supply chain disruptions in the Red Sea.

It now expects an underlying core profit ranging between $4 billion and $6 billion, up from $1 billion-$6 billion previously.

“We had a positive start to the year with a first quarter developing precisely as we expected,” Maersk chief executive Vincent Clerc said in a statement.

“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” he said.

“This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.”

Iran-backed Huthi rebels, who control the Yemeni capital Sanaa and much of the country’s Red Sea coast, have launched dozens of attacks on ships since November, claiming solidarity with Palestinians caught up in the Israel-Hamas war.

The United States in December announced a maritime security initiative to protect Red Sea shipping from the attacks, which have forced commercial vessels to divert from the route that normally carries 12 percent of global trade.

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