A.P. Moller-Maersk has reported a drop of 40% in its second quarter revenue, even as it warned of a steeper decline in global demand for shipping containers by sea this year.
The shipping giant said the drop in demand is prompted by muted economic growth and customers reducing inventories.
It said it expects container volumes to fall by as much as 4%. It had previously forecast a decline of no more than 2.5%.
“Maersk continue to expect muted global macro-economic growth given continued pressure from higher interest rates and potential recessionary risk in Europe and the United States,” the company said in a statement on Friday.
Maersk posted record earnings last year due to high freight rates caused by high consumer demand and pandemic-related logjams at ports. But freight rates have tumbled this year amid a global economic slowdown.
The company posted second-quarter earnings above expectations and narrowed its profit forecast for the year. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $2.91 billion in the quarter from $10.3 billion a year earlier while revenues fell 40% to $13 billion.
It now expects underlying EBITDA between $9.5 billion and $11 billion. It had previously predicted an underlying EBITDA of between $8 billion and $11 billion.
The company said the number of containers it loaded onto ships between April and June fell by 6% from a year earlier, while average freight rates halved.
“The second-quarter result contributed to a strong first half of the year, where we responded to sharp changes in market conditions prompted by destocking and subdued growth environment following the pandemic fuelled years,” Chief Executive Vincent Clerc said in a statement.
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