By Jacob Gronholt-Pedersen
COPENHAGEN, May 4 (Reuters) – Shipping group Maersk on Thursday reported better-than-expected first-quarter earnings and maintained its 2023 earnings forecast as it expects the recent contraction in demand for container transport to stabilize around mid-year becomes.
Maersk, which transports goods for retailers and consumer goods companies including Walmart, Nike and Unilever, said the number of containers it loaded onto ships between January and March fell 9% year-on-year, while freight rates averaged around 37% dropped.
“We have delivered solid financial performance in a challenging market with lower demand due to ongoing destocking,” Chief Executive Vincent Clerc said in a statement.
The company posted record profits last year as a surge in consumer demand and pandemic-related port congestion drove up freight rates.
But freight rates have since collapsed amid a global economic downturn and as pandemic-related import bubbles in the United States and other big consumer countries.
The company expects global demand for seaborne shipping containers to fall by up to 2.5% as a build-up of inventories is relieved.
“Visibility remains low for the remainder of the year and during this market normalization we remain focused on proactive cost management,” Clerc said, adding that the January through March period is expected to be the best quarter of the year.
Maersk, one of the world’s largest container shippers with a market share of around 17%, kept its full-year guidance unchanged and expected earnings before interest, taxes, depreciation and amortization (EBITDA) of between $8 billion and $11 billion, compared to a record 36 $.8 billion last year.
Maersk said its forecast for 2023 was based on “subdued” economic growth and that the decline in container shipments would stabilize around mid-year.
EBITDA fell to $3.97 billion for the quarter from $9.08 billion a year earlier, beating analysts’ expectations of $3.71 billion for the year Refinitiv poll. Revenue fell 26% to $14.21 billion.
(Reporting by Jacob Gronholt-Pedersen and Louise Rasmussen; Editing by Terje Solsvik and Kim Coghill)
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