Maersk CEO: 'Dark clouds on the horizon' amid Ukraine war, European energy crisis, potential recession
US and other countries have been grappling with inflation
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The CEO of A.P. Moller-Maersk A/S said Wednesday "there are plenty of dark clouds on the horizon" as the Danish shipping company reported its quarterly financial results.
"With the war in Ukraine, an energy crisis in Europe, high inflation and a looming global recession there are plenty of dark clouds on the horizon," CEO Søren Skou said in a press release. "This weighs on consumer purchasing power which, in turn, impacts global transportation and logistics demand."
The U.S. and some European countries and elsewhere have been grappling with persistent inflation.
In September, U.S. inflation — as measured by the consumer price index — rose 0.4% from August and 8.2% from the prior year, FOX Business previously reported.
Shipping containers sit aboard a Maersk container ship at the Port of Los Angeles Feb. 9, 2022, in San Pedro, Calif. (Mario Tama/Getty Images / Getty Images)
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The European Commission’s Eurostat said Monday it expected annual euro area inflation, worsened in part by the energy crisis exacerbated by Russia’s war in Ukraine, to come in at 10.7% in October after hitting 9.9% the prior month.
The International Monetary Fund and other organizations have raised concerns about the risks of the global economy potentially falling into a recession.
Skou's statement continued by adding that Maersk expects a "slowdown of the global economy to lead to a softer market in Ocean" but plans to "continue to pursue the growth opportunities within our logistics business." Its Ocean business, which the CEO said helped drive Maersk’s "exceptional results" in the third quarter, generated $18.02 billion in revenue.
A stream of Western companies pulling out of Russia is expected to grow as corporations and investors across industries follow the lead of energy firms BP and Shell, which abandoned multibillion-dollar positions after the invasion of Ukraine. (REUTERS/Murad Sezer/File Photo / Reuters)
In the release, he also noted "freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion."
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Maersk said "global container volumes are estimated to have declined 3% year-on-year." Global container demand is also projected to shrink 2 to 4% this year "as a result of slowing economic activity," according to the company.
Foreign container ships docked at Port of Felixstowe July 31, 2018, in Felixstowe, England. (Tim Graham/Getty Images / Getty Images)
The Danish shipping giant reported consolidated third-quarter revenues of $22.78 billion, rising 37% from the same period last year. Meanwhile, earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $10.86 billion, marking a roughly 56% jump year-over-year.
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Its full-year guidance is still projecting its 2022 EBITDA to be roughly $37 billion, according to Maersk.