COPENHAGEN: Shipping group A.P. Moller-Maersk on Wednesday warned of a sharp drop in global container volumes due to the coronavirus pandemic, sending its shares down sharply.
The coronavirus epidemic has thrown the global container shipping trade off balance as global supply chains have been upended and businesses and factory activity in China and later across the world were disrupted.
Maersk, which also reported a 23 percent rise in first-quarter core profits, now expects global container demand to contract this year, after previously forecasting growth of 1-3 percent.
“As global demand continues to be significantly affected, we expect volumes in the second quarter to decrease across all businesses, possibly by as much as 20-25 percent,” Chief Executive Soren Skou said in a statement.
Maersk shares were more than 5 percent lower in early trade. The shares have risen by a third since March when they reached their lowest level in more 10 years.
Maersk said that it had canceled more than 90 sailings, or 3.5 percent of total shipping capacity, in the first quarter to deal with the slowdown in trade and keep freight rates from falling.
It expects to cancel some 140 sailings in the April to June period.
Maersk reported earnings before interest, tax, depreciation and amortization (EBITDA) at $1.52 billion, slightly above company guidance provided in March when it suspended full-year guidance due to uncertainty caused by the coronavirus pandemic.
The world’s biggest container shipping company reported revenue of $9.57 billion versus the $9.59 billion forecast by 16 analysts in a poll compiled by Maersk.