Shipping company Maersk, a barometer for trade, warns of ‘dark clouds on the horizon’

Maersk delivered a record third-quarter result on Wednesday, but warned of “dark clouds on the horizon” as demand for shipping containers weakens.

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Maerskthe world’s largest container shipping company, on Wednesday delivered record profits for the third quarter on the back of high freight rates at sea, but noted a decline in demand.

The Danish giant, considered a barometer of global trade, reported earnings before interest, tax, depreciation and amortization (EBITDA) of $10.9 billion for the quarter, above consensus analysts’ estimates of $9.8 billion and up about 60% from same period. years ago.

The company reaffirmed its full-year guidance for underlying EBITDA of $37 billion and free cash flow in excess of $24 billion.

Chief executive Søren Skou said the “exceptional results” this year were driven by a continued increase in ocean freight rates, but said it was clear these had peaked and would begin to normalize in the fourth quarter due to falling demand and a relief of congestion in the supply chain. . Skou flagged that earnings in the company’s marine operations will decline over the coming months.

Shipping company Maersk, a barometer for trade, warns of ‘dark clouds on the horizon’

“With the war in Ukraine, an energy crisis in Europe, high inflation and a looming global recession, there are many dark clouds on the horizon,” Skou said in a statement on Wednesday.

“This weighs on consumer purchasing power which in turn affects global transport and logistics demand. While we expect a slowdown in the global economy to lead to a softer market in Ocean, we will continue to pursue growth opportunities within our logistics business.”

In its second quarter report, Maersk flagged an impending slowdown in global demand for shipping containers due to weakened consumer confidence and supply chain congestion.

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The company said on Wednesday that global container demand is expected to decline between 2% and 4% in 2022, down from a previous forecast of +1% to -1%, noting that freight and charter rates fell in the third quarter as demand moderated and Chinese Covid-19 restrictions were eased.

Maersk shares fell 6% in early trading in Europe.

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