Maersk sees drop in global container demand this year as supply chains hit

Maersk sees drop in global container demand this year as supply chains hit
Containers from shipping giant Maersk piled up in the freight yard of Berlin’s Behala west harbour in February. (AFP)
Short Url
Updated 14 May 2020

Maersk sees drop in global container demand this year as supply chains hit

Maersk sees drop in global container demand this year as supply chains hit

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. 


UAE’s Mubadala Petroleum signs Red Sea oil exploration deal with Egypt

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
Updated 23 January 2021

UAE’s Mubadala Petroleum signs Red Sea oil exploration deal with Egypt

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
  • It will own 27 percent of the stake as part of the agreement, while Shell will own 63 percent

CAIRO: The UAE’s Mubadala Petroleum Company has signed an agreement with Egypt to explore for oil and gas in the Red Sea.

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea and was a result of a bidding round in 2019.

It will own 27 percent of the stake as part of the agreement, while Shell will own 63 percent. Egypt’s Tharwa Petroleum Company owns the remaining 10 percent.

The agreement refers to an area known as Sector 4, located in the north of the Red Sea in an area adjacent to the Gulf of Suez Basin, which is rich in natural resources. 

Parties will commit to conducting exploration studies in this sector and collecting seismic data for the area, using three-dimensional techniques, during the first three years of the exploration phase.

“The addition of Sector 4 in the Red Sea represents a new extension of our operations in Egypt, while providing a valuable opportunity to expand our activities, and by working with a strategic partner such as Shell,” said Mubadala Petroleum CEO Bakheet Al Katheeri. “The search and exploration operations in this sector, if successful, will support our strategy of extracting and manufacturing hydrocarbons, in order to contribute to supporting the stability and expansion of the Egyptian market, while providing growth opportunities for our operations in the country.”

Mubadala Petroleum owns a 10 percent stake in the offshore Shurooq gas field concession that includes the Zohr natural gas field, in addition to 20 percent in the concession area of Noor Gas Company. Both are located in the Mediterranean Sea off the coast of Egypt.