Shipping group Maersk beat first-quarter profit forecasts on Thursday but warned that the Iran war had pushed its fuel costs up by around $500 million a month, adding that the energy crisis would persist even if a peace deal were reached.
Shares in Maersk fell 6.5% at 1100 GMT after the results, underperforming a broadly flat Copenhagen benchmark index amid concerns that high fuel prices could erode profits.
Maersk chief executive Vincent Clerc said the war had added roughly 3 billion Danish crowns ($472.7 million) to the company’s monthly costs, as bunker fuel prices surged from around $600 to just under $1,000 per metric tonne.
Clerc said Maersk had so far managed to recover those costs in full through contract renegotiations and spot rate increases, but cautioned that the energy crisis showed no sign of easing.
He added that passing on higher costs to customers had been challenging, but that Maersk had managed it so far. “They can understand, even if they don’t like it, why we have to do it,” he said. “It is not something we can just absorb.”
Maersk’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the January to March period stood at $1.73 billion, above a median forecast of $1.66 billion in a poll of 10 analysts.
However, the figure was significantly lower than the $2.71 billion reported for the same period last year.
The first quarter does not capture the full impact of the Iran war on global supply chains, as it began on 28 February when the U.S. and Israel launched coordinated strikes on Iran.
The war has disrupted shipping routes after Iran closed the Strait of Hormuz to commercial traffic. The company has six ships stranded in the Gulf, a spokesperson said.
Clerc noted that only 2% to 3% of global container trade flows to and from the Gulf, giving the industry sufficient resilience to cope with the closure.
The greater risk, he said, would arise if sustained high energy prices triggered widespread inflation, leading to recession and a drop in demand. He described a scenario of high costs, weak demand and overcapacity as “a dangerous cocktail.”
The Middle East situation is also affecting shipping in the Red Sea, forcing Maersk to continue rerouting vessels around Africa, away from the Suez Canal and the Bab el-Mandeb Strait.
Maersk is currently assessing whether conditions in the Red Sea may soon be safe enough to resume some sailings through Suez, which would significantly reduce fuel costs and transit times on the critical Asia–Europe corridor, Clerc said.
The death toll from last week's catastrophic floods in Nepal and Tibet rose to 939 on Monday, with 3,044 peo...
At least 11 people, including eight children, have been killed after a powerful explosion at a firecracker fact...
Recovery teams are continuing operations in Grand Canyon National Park after flash floods swept through parts of the canyon over the weekend, leavi...
Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan have concluded talks in Bishkek, the capital of Kyrgyzstan, as leaders gather for the Shanghai Cooperation Organisation (SCO) summit.
Iran has reached an understanding with Oman on transit arrangements through the Strait of Hormuz, but the waterway will remain closed until the U.S. fulfils its commitments, a senior Iranian diplomat said on Saturday.
Iranian Foreign Minister Abbas Araghchi accused U.S. government and Israel-aligned actors of manipulating energy markets to promote the war with Iran.
Russian strikes on the Kyiv region overnight killed 37 people, Ukrainian President Volodymyr Zelenskyy has said. Zelenskyy added that the Ukrainian capital was under "virtually nonstop attack" from drones.
U.S. forces struck two Iranian rocket launchers on Larak Island on Sunday, with Tehran responding by launching ballistic missiles at two U.S. bases in Jordan in the first direct U.S.-Iran military escalation in weeks.
The death toll from last week's catastrophic floods in Nepal and Tibet rose to 939 on Monday, with 3,044 people still missing, as fresh rainfall pushed up river levels and forced rescuers to move to higher ground.
Recovery teams are continuing operations in Grand Canyon National Park after flash floods swept through parts of the canyon over the weekend, leaving one person dead and leading to the discovery of a second body that has yet to be recovered.
Türkiye, Pakistan and Saudi Arabia have formalised their new defensive alliance at the grouping’s first high-level meeting held Monday in Istanbul.
Iran’s President Masoud Pezeshkian has stated that Tehran is not pursuing a military conflict but promised a strong response to 'aggressors' while the Army and Revolutionary Guards said they carried out retaliatory attacks against U.S. bases in the region on Monday.
Kyrgyzstan is hosting the sixth World Nomad Games, bringing together thousands of athletes from around the world for a celebration of traditional sports, cultural heritage and nomadic traditions.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment