Shipping Giant Maersk Warns Trade War Could Hurt Container Business
A.P. Moller-Maersk beat second-quarter profit expectations to send the shipping group's shares up almost 7% in early trade on Thursday but warned a trade war between the United States and China could curb container traffic this year.
The world's largest container shipping company said it still expects global container traffic to grow by 1% to 3% this year, after growth of around 2% between April and June.
However, it said an escalating trade dispute between Washington and Beijing could limit growth to the lower end of that range.
Newly imposed tariffs between the United States and China combined with additional U.S. tariffs due to be implemented later this year could remove up to 1.5% of global container demand in 2020, Maersk said.
Chief Executive Soren Skou said Maersk had seen "solid progress" in the second quarter, including realising synergies of $1 billion from restructuring earlier than expected.
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 17% to $1.36 billion, topping the $1.24 billion forecast by analysts in a Reuters poll.
Maersk benefited from higher container freight rates, larger volumes and lower costs and said it still expects EBITDA for the full year to total $5 billion.
Skou has overseen a major shift in Maersk's strategy, which has included selling off its oil and gas business to focus on the container and logistics business for customers which include Walmart and Nike.
Maersk's share price has fallen 43% since a peak in July 2017 and now trades around the level it was at when Skou took on the CEO job in June 2016.