Maersk sees drop in global container demand this year
Coronavirus pandemic hits global supply chains
Shipping group AP Moller-Maersk on Wednesday warned of a sharp drop in global container volumes due to the coronavirus pandemic, sending its shares down sharply.
The coronavirus epidemic has thrown the global container shipping trade off balance as global supply chains have been upended and businesses and factory activity in China and later across the world was disrupted.
Maersk, which also reported a 23 per cent rise in first-quarter core profits, now expects global container demand to contract this year, after previously forecasting growth of 1 per cent to 3 per cent.
“As global demand continues to be significantly affected, we expect volumes in the second quarter to decrease across all businesses, possibly by as much as 20 per cent to 25 per cent,” chief executive Soren Skou said in a statement.
Maersk said it had cancelled more than 90 sailings, or 3.5 per cent of total shipping capacity in the first quarter to deal with the slowdown in trade and keep freight rates from falling.
It expects to cancel some 140 sailings in the April to June period.
Maersk reported earnings before interest, tax, depreciation and amortisation (ebidta) at $1.52 billion, slightly above company guidance provided in March when it suspended full-year guidance due to uncertainty caused by the coronavirus pandemic.
The world’s biggest container shipping company reported revenue of $9.57 billion versus the $9.59 billion forecast by 16 analysts in a poll compiled by Maersk. – Reuters