A.P. Moller-Maersk
is undertaking significant job cuts after profit collapsed at the container shipping giant, a grim sign for global trade after last year’s boom.
Maersk (ticker: MAERSK A.DENMARK & MAERSK B.DENMARK) reported third-quarter earnings before interest, taxes, depreciation, and amortization (Ebitda) of $1.9 billion on revenue of $12.1 billion on Friday. The results—with both metrics below estimates of analysts surveyed by FactSet—mark a sharp decline from the same period in 2022, when quarterly profit at Maersk was $10.9 billion on $22.8 billion in revenue.
“Our industry is facing a new normal with subdued demand, prices back in line with historical levels and inflationary pressure on our cost base,” said Vincent Clerc, Maersk’s CEO. “Since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling.”
Shares in Maersk tumbled more than 12% in Copenhagen trading on Friday.
After a post-Covid shipping boom, a slowing global macroeconomic backdrop and shifting geopolitical dynamics—including protectionism and supply-chain adjustments—are pinching hard. As a dominant force in shipping, Maersk’s results are an excellent bellwether for global trade—and the forecast is gloomy.
Maersk now sees global container volumes falling 0.5% to 2% in 2023, albeit slightly better than its previous forecast, but has said it now expects its full-year results to be at the lower end of previously communicated ranges. The range for yearly underlying Ebitda remains $9.5 billion to $11 billion.
As it faces a pronounced slowdown, Maersk is taking dramatic cost-cutting measures, including shedding its workforce. The company has already reduced its head count from 110,000 in early 2023 to some 103,500, and announced Friday that it would cut a further 3,500 positions.
Write to Jack Denton at [email protected]
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