Maersk's 'exceptionally strong' Q1 performance to go on for rest of 2021: CEO
DANISH shipping giant Maersk says it expects its "exceptionally strong" performance in the first quarter of the year to continue for the rest of 2021, according to media reports.
The shipping line reported a first quarter net income of US$2.7 billion compared to $197 million in the same period last year. EBITDA increased to $4.0 billion from $1.5 billion, while first quarter revenue increased by 30 per cent to $12.4 billion from $9.6 billion in the previous year.
The company said revenue growth was driven by an increase in Ocean of 31 per cent, while revenue increased in Logistics & Services by 42 per cent.
Chief Executive Soren Skou attributed the Q1 strong performance by high demand for shipping containers from China to the US.
Maersk, which handles about one in five containers shipped worldwide, said there were not enough ships available in the world to meet a surge in consumer demand, resulting in record-high freight rates.
"The situation today is that our customers are trying to meet a very, very high underlying demand, while at the same time rebuilding stock," Mr Skou told a media call.
Large retailers and producers have said congestion at ports, container shortages and delays at the Suez Canal were causing problems in shipping products made in Asia to key markets.
Imports into North American from Asia rose 40 per cent in the first three months of the year. Container ships are now waiting 16 days outside the port in Los Angeles to unload, Mr Skou said.
"This is a huge problem for our customers," the CEO said. "It's a mess and it will take some time to clear."
Maersk last week raised its outlook for full-year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $13 billion-$15 billion from $8.5 billion-$10.5 billion.
It lifted its forecast for global container demand growth to 5-7 per cent from 3-5 per cent. "We now expect the current dynamics to last into the fourth quarter," Mr Skou said.
Maersk said high free cash flow had prompted it to speed up an existing $1.6 billion share buyback programme and launch a new $5 billion share buyback programme that will conclude in 2023.
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