AP Møller-Mærsk has downgraded its full-year outlook for underlying profit by $600m (£390m) to about $3.4bn, citing deterioration in the container shipping market.
The Copenhagen-based shipping and oil conglomerate, which controls the world’s largest container shipping company Mærsk Line, said global market conditions were weaker than expected.
Mærsk Line is an economic bellwether for global trade, which has been impacted by slow growth, but the business has also been hit by heavy overcapacity.
Freight rates for transporting standard containers from Asia to northern Europe, carrying anything from flat-screen TVs to sportswear, were $233 last week – widely considered to be a loss-making level.
The group’s chief executive, Nils Andersen, said Mærsk Line had taken steps in recent years to ensure a “cost-effective and resilient operation” but the weak container shipping market was taking its toll.
A toxic mix of overcapacity, low demand and aggressive pricing is depressing profits in the industry that carries up to 90% of global trade. Analysts said the profit downgrade had been larger than expected.
“Mærsk Line has been hit harder than expected by low capacity utilization due to the low volume growth in the global container transportation market,” Sydbank analyst Jacob Pedersen said.
Shares in AP Møller-Mærsk were down 6.5% in early trading on Friday.