Maersk raises profit outlook as data centre demand supports trade, shares slide on Q3 miss

Traders Union
All News
Business & Wealth
Companies
Maersk raises profit outlook

Highlights

Maersk raises 2024 underlying operating profit guidance to $8bn-$8.5bn from the previous $4.5bn-$6.5bn due to resilient container demand and structural growth in AI and data centre sectors.
Shares fall 10 per cent after third-quarter EBITDA hits $4.7bn, missing the Visible Alpha consensus of $5.5bn despite a 75 per cent year-on-year gain.
Maersk resumes new ship orders to recapture volume after rivals expanded fleets, risking further capacity losses to MSC and CMA CGM.

Higher guidance driven by trade resilience

As reported by the Financial Times, Maersk raises its forecast for underlying operating profit this year to $8bn-$8.5bn from the $4.5bn-$6.5bn range it gave in August. The Danish shipping group began the year expecting an operating loss of as much as $1.5bn, marking a sharp turnaround in its outlook.

Vincent Clerc, Maersk’s chief executive, says demand is proving more resilient than expected as container volumes benefit not only from consumer goods but also from structural growth tied to data centres, AI, electrification and the energy transition. He says these investment areas are likely to be less cyclical than consumer goods, supporting confidence in container demand over the coming years.

Global trade demand has defied expectations of a slowdown linked to high inflation and the war in Iran. Clerc says shipping demand between the U.S. and China and the rest of Asia continues to surprise executives across the sector.

Investor reaction and competitive pressure

Investors nevertheless push Maersk shares down 10 per cent after weaker than expected third-quarter results, a key period for shipping as retailers move goods ahead of Christmas. Third-quarter earnings before interest, tax, depreciation and amortisation rise 75 per cent from a year earlier to $4.7bn, but remain below the Visible Alpha consensus of $5.5bn.

Clerc says analysts set an unrealistic benchmark after a particularly strong second quarter. He argues the company is still performing well despite the earnings shortfall against market forecasts.

Maersk also adjusts strategy after taking a more cautious approach than rivals to fleet expansion following the Covid-19 pandemic. The group had long warned of overcapacity in container shipping and lost its position as the world’s largest container line to Mediterranean Shipping Company in 2022, while analysts say France’s CMA CGM could soon overtake it as the sector’s number two player by capacity.

In response, Maersk orders more new ships over the summer. Clerc says the company is well placed to benefit from long-term cargo demand because ocean shipping carries nearly all solar panels globally as well as major components used in wind turbines, cooling systems, data centres and semiconductors.

In our earlier report on the WTO’s view of conflict-driven trade shifts, we covered how wars in Ukraine and the Middle East are pushing companies to redesign supply chains and shipping routes to build resilience, even at higher cost. The WTO also flagged a sharp contraction in Middle East trade linked to the Iran war, while noting that AI-related demand and expanding regional trade could help cushion broader disruption.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.