- Maersk reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $10.9 billion for the quarter.
- The company confirmed its full-year guidance for underlying EBITDA of $37 billion and free cash flow above $24 billion.
Shipping firm Maersk, a barometer for global trade, warns of ‘dark clouds on the horizon, reports CNBC.
Background
Maersk, one of the world’s largest container shipping firms, published a record profit for the third quarter on the back of high ocean freight rates but reported a downshift in demand.
Widely seen as a barometer for global trade, Maersk, recounted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $10.9 billion for the quarter, above consensus analyst projections of $9.8 billion and up around 60% from the same period a year ago.
The company confirmed its full-year guidance for underlying EBITDA of $37 billion and free cash flow above $24 billion.
CEO Soren Skou said the “exceptional results” this year were steered by a renewed surge in ocean freight rates but said it was apparent that it peaked and will begin to regularize in the fourth quarter amid declining demand and an easing of supply chain congestion. Skou flagged that earnings in Maersk’s ocean operations will come down in the coming months.
In its second-quarter report, Maersk flagged an upcoming deceleration in global shipping container demand among depleting consumer confidence and supply chain congestion.
Key details
The company said that global container demand is anticipated to contract between 2% and 4% in 2022, down from a previous projection of +1% to -1%, noting that freight and charter rates dwindled in the third quarter as demand moderated and Chinese Covid-19 restrictions curtailed.
“With the war in Ukraine, an energy crisis in Europe, high inflation, and a looming global recession there are plenty of dark clouds on the horizon.
This weighs on consumer purchasing power which in turn impacts global transportation and logistics demand. While we expect a slow-down of the global economy to lead to a softer market in Ocean, we will continue to pursue the growth opportunities within our Logistics business,” Skou said in a statement.
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Source: CNBC
