The world’s largest container shipping company increases sales in the second quarter

The crane loads an AP Moller-Maersk brand sea container onto the cargo ship.

Balint Porneczi | Bloomberg | Getty Images

Maersk, the world’s largest container shipping company, saw sales jump in the second quarter as traffic jams and bottlenecks continued to drive up freight costs.

The company announced Friday that it had $ 5.1 billion in interest, taxes, depreciation, and earnings before interest (EBITDA). This is a 200% increase over the $ 1.7 billion reported in the same period last year. Revenue grew nearly 60% to $ 14.2 billion.

Container shipments skyrocketed as the global economy recovered from the Covid-19 pandemic and demand for raw materials recovered, but a shortage of containers put pressure on the supply chain. Recently, prices have been even higher in some countries due to the combination of increased retailer orders and lower turnaround times due to the Covid-19 outbreak.

Mr Suk told CNBC’s “Squawk Box Europe” on Friday.

“At the same time, of course, there were traffic jams in Los Angeles, the Suez Canal was closed for a week and one of the largest ports in China was closed for more than a week in the last quarter. It has, so to speak, robbed the market of our capacity. It exacerbates the problem. “

For example, fees from China to the United States hit a record high of over $ 20,000 per 40-foot crate, more than 500% more than a year ago, according to freight tracking company Freightos.

According to Skou, companies are trying to meet strong retail demand while increasing their inventory levels, as evidenced by the very low inventory-to-sales ratio in the US, which could last at least until the next quarter. It contributes to the strong demand for a container.

“We continue to build higher quality shipping companies on longer term contracts, with more than half of 38% growth coming from top shipping customers for fast growing and profitable logistics companies and profitability. We’ll build a value-adding terminal business that will double in the quarter. “

Maersk’s return on invested capital has hit 23.7% over the past 12 months, and Skou said his profits and cash flow will allow him to make targeted acquisitions while giving money back to shareholders. I did.

The Danish giant also announced on Friday that it was taking over parcel delivery companies Visible Supply Chain Management and B2C Europe as part of its plans to expand its e-commerce capabilities.

“The outlook for the third quarter is solid and we expect the current ocean dynamics to continue into the fourth quarter and benefit the terminal business,” Suk said in a statement.

Maersk on Monday raised its guidance for 2021 from $ 18 billion to underlying EBITDA of $ 19.5 billion, with expected free cash flow of at least $ 11.5 billion.

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