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Delivery agency Maersk, a barometer for commerce, warns of ‘darkish clouds on the horizon’

Delivery agency Maersk, a barometer for commerce, warns of ‘darkish clouds on the horizon’

Maersk on Wednesday posted a file third-quarter revenue however warned of ‘darkish clouds on the horizon’ as delivery container demand weakens.

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Maersk, one of many world’s largest container delivery companies, on Wednesday posted file revenue for the third quarter on the again of excessive ocean freight charges, however famous a slowdown in demand.

The Danish large, extensively seen as a barometer for world commerce, reported earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) of $10.9 billion for the quarter, above consensus analyst projections of $9.8 billion and up round 60% from the identical interval a yr in the past.

The corporate confirmed its full-year steering for underlying EBITDA of $37 billion and free money stream above $24 billion.

CEO Soren Skou mentioned the “distinctive outcomes” this yr have been pushed by a continued rise in ocean freight charges, however mentioned it was clear that these have peaked and can start to normalize within the fourth quarter amid falling demand and an easing of provide chain congestion. Skou flagged that earnings in Maersk’s ocean operations will come down within the coming months.

Delivery agency Maersk, a barometer for commerce, warns of ‘darkish clouds on the horizon’

“With the struggle in Ukraine, an power disaster in Europe, excessive inflation, and a looming world recession there are many darkish clouds on the horizon,” Skou mentioned in a press release Wednesday.

“This weighs on shopper buying energy which in flip impacts world transportation and logistics demand. Whereas we count on a slow-down of the worldwide economic system to result in a softer market in Ocean, we are going to proceed to pursue the expansion alternatives inside our Logistics enterprise.”

In its second-quarter report, Maersk flagged an impending slowdown in world delivery container demand amid weakening shopper confidence and provide chain congestion.

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The corporate mentioned Wednesday that world container demand is anticipated to contract between 2% and 4% in 2022, down from a earlier projection of +1% to -1%, noting that freight and constitution charges declined within the third quarter as demand moderated and Chinese language Covid-19 restrictions diminished.

Maersk shares have been down 6% throughout early buying and selling in Europe.

Correction: The headline and textual content of this story have been up to date to right a reference to Maersk’s market share.

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