Maersk profits double on higher freight prices

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.

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. (AFP)

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