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.
Saudi Arabia’s air defences have intercepted and destroyed a hostile drone over the Riyadh region, according to the Saudi-led coalition fight...
Police were deployed across Paris on Saturday, as a curfew was set to take effect in the Republique and Chât...
A drone strike hit a power station in northern Sudan early Sunday (1 November), sparking a fire and triggering loud explosions, witnesses said....
The U.S. has approved the sale of 500 Patriot PAC-3 missiles to Ukraine in a deal worth an estimated $2.1 billion, but Kyiv could face years of delays before receiving the weapons it urgently needs to defend against intensifying Russian attacks.
Iranian Supreme Leader Ayatollah Khamenei has ordered Iran's armed forces to respond to any threat immediately and without geographical limits in statements posted to social media platforms on Saturday (31 October).
Demonstrators carrying Iranian flags and placards supporting the hijab gathered outside the Azerbaijani Embassy in London.
A Chinese-made AI chip has matched Nvidia’s H200 in tests conducted by its developer, marking a potential breakthrough in China’s efforts to reduce its dependence on foreign technology.
A hacking group linked to North Korea is widely believed to be behind the theft of $6.3 billion from cryptocurrency giant Binance, a cyberattack that experts describe as the largest cryptocurrency heist on record.
Police were deployed across Paris on Saturday, as a curfew was set to take effect in the Republique and Châtelet-Les Halles areas from 11pm Saturday until 6am Sunday (1 November).
A drone strike hit a power station in northern Sudan early Sunday (1 November), sparking a fire and triggering loud explosions, witnesses said.
Gen Z protests swept 34 German cities on Saturday (31 October) over education and living costs. Violence erupted in Frankfurt, where shops were looted and police reported Molotov cocktail attacks.
Iran designated Britain's Royal Navy and Royal Air Force as terrorist organisations on Sunday, (1 November), and classified the country's foreign intelligence agency, MI6, as a hostile group, according to a statement from the Iranian Foreign Ministry.
Thousands protested in Albania's capital, Tirana, on Saturday (31 October), demanding Prime Minister Edi Rama's resignation over perceived corruption allegations and dissatisfaction with the government over a lack of jobs and poor education standards.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment