Maersk Raises Financial Forecast for 2024 Amid Strong Market Demand, Red Sea Disruptions

A.P. Moller – Maersk has revised its financial guidance for 2024 after a strong Q1. The company now expects an underlying EBIT of USD -2.0 to 0.0 billion for the full-year 2024, marking a significant recovery from the fourth quarter of 2023.

The elevated earnings have been attributed to a robust performance by the Terminals division as well as increased demand and an ongoing crisis in the Red Sea, which are expected to continue impact the company’s performance into the second half of the year.

“We began the year on a positive note, with the first quarter unfolding exactly as we had anticipated,” said Vincent Clerc, CEO of Maersk. “Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched. 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.”

However, Clerc anticipates that the delivery of a high number of new vessels in the coming years will offset positive factors and put renewed pressure on the ocean freight markets.

“We therefore relentlessly continue to pursue our cost agenda with the aim of rolling back the disruption linked cost in Ocean and restoring margins in Logistics & Services. This work on cost, helped by our strong value proposition, is crucial in supporting our customers through the ongoing volatility and build a more resilient business,” he said.

The company’s Ocean division showed improvement due to high volumes and cost discipline, while the Logistics & Services division experienced volume growth but “unsatisfactory” margins due to low warehouse utilization and contract implementation challenges. The Terminals division reported strong results, with cost management and high productivity enhancing margins.

In line with its aim to focus on end-to-end logistics, Maersk has streamlined its portfolio through the spin-off of Svitzer, which was approved and completed in April.

For 2024, Maersk raises its financial guidance range with underlying EBITDA now expected between USD 4 and 6 billion, up from USD 1 to 6 billion previously. This optimistic forecast is based on strong market demand and the company’s growth in line with the market. However, the company remains cautious about the ongoing supply challenges and their eventual impact.

“The ongoing Red Sea / Gulf of Aden situation is expected to continue into the second half of the year. Over-supply remains a challenge and will eventually prevail, but the impact is delayed,” Maersk said.

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