Maersk (AMKBY) says lower freight rates resulted in a big decline in its second quarter earnings. Its shares were down 5.0% on Friday.

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Maersk reports a 40% decline in revenue

The world’s 2^nd largest shipping company reported $2.91 billion in EBITDA – down 72% versus a record $10.3 billion in the second quarter of 2022.

Still, the figure came in well ahead of $2.41 billion that experts had forecast. On CNBC’s “Squawk Box Europe”, Vincent Clerc said today:

 

We knew at some point correction would come. What’s been important was to cushion it through increased focus on costs, making sure we’re ready for leaner times. The team has executed very well.

Maersk also recorded a 40% hit to revenue as well that printed at $21.65 billion in its fiscal Q2. Wall Street currently rates this stock at “hold” on average.

Maersk sees continued weakness ahead

More importantly, the shipping giant warns of continued weakness in container demand amidst risks of a recession both in Europe and the United States.

It now sees volumes down up to 4.0% in 2023, as per the press release. CEO Clerc also said in his interview with CNBC:

 

As we start the year, we saw China reopening as one of the positives. It’s not really how that’s shaping, which is also why we’re maintaining an outlook that is fairly subdued.

Still, Maersk narrowed its profit guidance for the full year on Friday. The Danish firm now expects its underlying EBITDA to fall between $9.5 billion and $11 billion in 2023. Its shares are now down nearly 25% versus their year-to-date high.

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