On Friday, the $23 billion Danish firm revealed a 94% profit plunge in the third quarter. Boss Vincent Clerc is not alone in trying to manage a crisis that is battering the container shipping world and which analysts at DNB Markets reckon could last up to 2030. He plans to cut at least 10,000 jobs to combat an overcapacity in his fleet, rising costs and weaker prices. He may also suspend the company’s share buyback programme which has been put under review.
Fall in freight rates
Clerc has little room to grow other than saving money to invest in logistics and offset the pain caused by the company’s ocean arm. The unit, which handles container shipping, reported a 56% drop in third-quarter sales due to a steep fall in freight rates.
JPMorgan’s analysts say Maersk’s shares trade 30% below what the company’s assets are worth. If Clerc succeeds in expanding the logistics business, investors may begin agitating for more radical action in the future.
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Source: Reuters
