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Maersk warns trade war hit container shipping

Maersk warns trade war hit container shipping
FILE PHOTO: Container ship Maersk Binta sails in the Bosphorus in Istanbul, Turkey July 27, 2018. REUTERS/Osman Orsal/File Photo   -   Copyright  Osman Orsal(Reuters)
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By Jacob Gronholt-Pedersen

COPENHAGEN (Reuters) – Danish shipping group A.P. Moller-Maersk <MAERSKb.CO> beat third-quarter operating profit forecasts on Wednesday, but said a trade war between the United States and China had hit demand for container shipping.

Maersk, the world’s biggest container shipper, said the effect of trade tensions could reduce global container trade between 0.5 and 2 percent during 2019 and 2020.

It said volume growth in container shipping, excluding those from Hamburg Sud, was lower than expected and unexpectedly fell by 1.9 percent from the previous quarter.

The company narrowed its expectation for full-year earnings before interest, tax, depreciation and amortisation (EBITDA) to $3.6 billion to $4.0 billion from $3.5 billion to $4.2 billion previously.

The former conglomerate is restructuring to focus entirely on transport and logistics and plans to step up competition with delivery companies UPS <UPS.N> and Fedex <FDX.N>.

Maersk bought German rival Hamburg Sud in 2016, which helped it boost revenue in the quarter by 31 percent from a year earlier to $10.08 billion, above the $9.98 billion expected by analysts in a Reuters poll.

EBITDA totalled $1.14 billion for the quarter, compared with 1.09 billion forecast by analysts.

However, unit costs – a key parameter in the shipping industry showing how competitive prices each liner can offer its customers – rose unexpectedly by 1.5 percent to $1,809 per forty foot container from the previous quarter.

(Reporting by Jacob Gronholt-Pedersen; Editing by Susan Fenton and Louise Heavens)

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