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Copenhagen-based Maersk said the coronavirus pandemic has already “had a significant impact on the activity level.” The company now sees the global container market contracting this year, compared with a previous forecast for growth of somewhere between 1% and 3%.
The bleak signal from Maersk follows a warning from the World Trade Organization last month that the pandemic could result in the worst collapse in international trade flows since World War II.
Maersk said that global container trade fell 4.7% in the first quarter, with Covid-19 hitting both the supply chain and demand.
“Covid-19 and the subsequent country lockdowns have led to a severe downturn in production and demand in most parts of the world,” Maersk said. “While some countries are slowly beginning to open up, others are still only in the early stages.”
Though the global outlook is grim, Maersk managed to deliver growth in its operating profit. After earlier reporting preliminary Ebitda of $1.4 billion, Maersk delivered $1.52 billion by that measure, according to Wednesday’s report.
“It’s not unrealistic that they might at least get somewhere near” the $5.5 billion Ebitda outlook that was announced before 2020 guidance was suspended, said Per Hansen, an investment economist at Nordnet. Still, the second quarter “will be weighed down by high waves and huge uncertainty.”
Maersk’s revenue increased slightly to $9.57 billion, which was better than the $9.36 billion estimated by analysts.
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Global trade flows are being disrupted on an unprecedented scale as both producers and consumers get hit by lockdowns that have wiped out demand. As a result, the industry has had to idle about 13% of its fleet worldwide, according to data compiled by Alphaliner.
(Adds context on global trade from third paragraph)
©2020 Bloomberg L.P.
