Danish shipping giant Maersk announced on Monday that it expects its profits in 2024 to exceed previous projections by $3 billion, attributing the increase to rising freight rates amid the ongoing crisis in the Red Sea.

Persistent attacks by Yemen’s Iran-backed Huthi rebels have led some shipping companies to reroute around southern Africa, bypassing the Red Sea, a crucial maritime passage that handles about 12 percent of global trade.

In a statement, Maersk highlighted that the “disruption caused by the ongoing crisis in the Red Sea” and “continued strong container market demand” contribute to further port congestion and rising container freight rates. “This development is gradually building up and is expected to contribute to a stronger financial performance in the second half of 2024,” the company said.

Maersk now anticipates its underlying core profit (earnings before interest, taxes, depreciation, and amortisation or EBIDA) to be between $7 billion and $9 billion for the full year. This is a significant increase from the $4 billion to $6 billion forecasted in May during the first quarter earnings report.

The Houthi rebels, who control much of Yemen, have carried out numerous drone and missile attacks on ships since November, citing support for Palestinians in the Israel-Hamas conflict. In response, the United States and Britain have conducted multiple strikes on Houthi targets in Yemen since January to counter the rebels’ threats to shipping.

Most recently, on Friday, the Huthis launched several drones and two ballistic missiles following deadly overnight strikes by American and British forces, which the rebels claimed resulted in 16 deaths.

Maersk acknowledged that trading conditions remain volatile due to the unpredictability of the Red Sea situation and the uncertain future of supply and demand dynamics.

The company plans to release its earnings for the second quarter of 2024 on August 7.