Depending on whether you look at its profits or stock performance, A.P. Moller-Maersk is having either the greatest year in its history, or the worst in more than a decade. Much of the discrepancy is due to investors anticipating a drop in future earnings, but the contrast is still stark for the company.
Maersk profits have surged because a shortage of shipping capacity, amplified by supply-chain bottlenecks and Covid-19 lockdowns, caused freight rates to soar. Rates climbed more than sevenfold from October 2019 to their peak in January 2022, according to the Shanghai Shipping Exchange Container Index, a measure for freight out of China, before dropping back about 60% as ports opened up and congestion eased.
As a result, the company’s earnings are likely on a roller-coaster ride. Net income will almost double from 2021’s already high level to a record $29.3 billion this year, according to the latest survey by Bloomberg, which includes 13 analysts. That will make it the third-highest earner in the Stoxx Europe 600 index. Next year looks very different, with analysts predicting net income dropping more than 70% to just $7.97 billion.
Source: bnnbloomberg.ca
