The Danish shipping company Maersk, which controls approximately one-sixth of the world’s container transport, saw a sharp drop in sales and profit in the third quarter of this year, Reuters reports. The company will therefore lay off at least 10,000 employees, i.e. over nine percent of its workforce. Shares of Maersk, traded on the Copenhagen stock exchange, fell sharply by more than fifteen percent on Friday in response to the news.
The gross operating profit (EBITDA) of the Danish carrier fell by almost 83 percent year-on-year to 1.9 billion dollars, i.e. about 43.6 billion crowns. The company also pointed to a sharper drop in demand than analysts and investors had expected. However, he maintained a full-year outlook.
Maersk is one of the most important container carriers in the world and is considered a barometer of world trade. It carries goods for a number of major retailers such as Walmart or Nike.
The company’s revenue fell 47 percent to $12.1 billion in the period from July to September. In terms of gross operating profit, the company beat market estimates. Analysts polled by Refinitiv were expecting an average EBITDA of $1.81 billion.
“Since the summer, we have seen excess capacity in most regions, which has caused a drop in prices,” said the head of the company, Vincent Clerc. Among the negative factors, he drew attention to the slowdown in demand and inflationary pressures.
The company also said it will reduce its workforce from 110,000 in January to less than 100,000 due to overcapacity, rising costs and falling prices. Thanks to this move, he expects to save $600 million in the next year.
Maersk expects global container shipping volume to fall by up to two percent this year. The company identified weak consumer demand and the fact that companies are reducing inventories as the main factors.
According to analyst Morten Holm Enggaard of Jyske Bank, the company’s share value was negatively affected mainly by the company’s announcement that it will reconsider whether to continue its share buyback program until 2024 “The only way we can interpret this is that in 2024 we have something very bad,” believes Enggaard.