COPENHAGEN (Reuters) – Maersk said on Thursday that a saturation of container ship supply would hit its profit more than expected this year and that rising freight rates linked to disruptions in the Red Sea would not provide a major boost. .
This warning, which also led the Danish shipping giant to suspend its share buyback program, contrasts sharply with investors’ optimism towards the sector.
Container shipping carriers are among Europe’s best performing stocks in 2024 so far, with freight rates soaring following attacks by Houthi militants on ships in the Red Sea, a major trade route .
Maersk Chief Executive Vincent Clerc, however, told reporters in Copenhagen that the group did not expect disruptions in the Red Sea to have a major impact, unlike the bottlenecks caused by the pandemic in coronavirus, which boosted carrier profits.
In contrast, Maersk said it expects “significant oversupply challenges” in container shipping to fully materialize in 2024, extend into 2025 or even 2026.
“The outlook for 2024 looks even more challenging than for 2023 in the Ocean division, as vessel oversupply reaches its peak and Maersk’s contractual exposure allows it to benefit limited from subsequent spot rate increases Red Sea hijackings,” Barclays analysts said in a note.
On the Copenhagen Stock Exchange, Maersk shares fell 15.12% at 11:27 GMT and dragged in its wake its German competitor Hapag Lloyd, which fell at the same time by 7.90%.
During the fourth quarter, Maersk’s earnings before interest, taxes, depreciation and amortization (Ebitda) fell to $839 million (779.09 million euros), from $6.54 billion a year earlier, below the expectations of analysts who expected $1.13 billion.
Maersk, considered a barometer of global trade, said it expects Ebitda of between $1 billion and $6 billion this year, up from $9.6 billion last year.
Analysts surveyed by LSEG on average forecast Ebitda of $6.6 billion this year.
The company also suspended its share buyback program and said it would review its decision once shipping market conditions stabilize.
“Great uncertainty remains over the duration and degree of disruption in the Red Sea, which could last from a quarter to a full year depending on the forecast range,” the company said in a statement.
(Reporting Jacob Gronholt-Pedersen; French version Mathias de Rozario and Dagmarah Mackos, editing by Kate Entringer)
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