By Stine Jacobsen and Jesus Calero
COPENHAGEN, May 7 (Reuters) – Shipping group Maersk beat first-quarter profit forecasts on Thursday but warned the Iran war had pushed its fuel costs up by nearly $500 million a month and that the energy crisis would persist even if a peace deal was reached.
Shares in Maersk were down 6.5% at 1100 GMT after its results, underperforming a broadly flat Copenhagen benchmark index amid worries that high fuel prices could hit profits.
Maersk CEO Vincent Clerc said the war had added roughly 3 billion Danish crowns ($472.7 million) to the company’s monthly costs as bunker fuel prices surged from around $600 to just under $1,000 per metric ton.
Clerc said Maersk had so far managed to recover those costs in full through contract renegotiations and spot rate increases, but cautioned that the energy crisis showed no sign of fading.
“The energy crisis does not go away the day peace comes,” Clerc told a press conference. “Oil companies I speak to … expect it to last at minimum several more months, possibly many more months,” he added.
Clerc said passing on the higher costs to customers had been difficult but that Maersk had managed it until now. “They can understand, even if they don’t like it, why we have to do it,” he said. “(It) is not something we can just absorb.”
Maersk, which is viewed as a bellwether for global trade, still projects global container volume growth of between 2% and 4% this year but said the situation remained volatile.
PROFIT DOWN BUT BEATS FORECAST
Maersk’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the January to March period were $1.73 billion, compared to a median forecast of $1.66 billion in a company-provided poll of 10 analysts, but well below the $2.71 billion for the same period a year ago.
The first quarter does not capture the Iran war’s full impact on global supply chains as it began on February 28 when the U.S. and Israel launched coordinated strikes on Iran.
The war has disrupted shipping routes after Iran closed the Strait of Hormuz to commercial traffic. The company has six ships trapped in the Gulf, a spokesperson said.
Clerc said only 2% to 3% of global container trade flows to and from the Gulf, giving the container shipping industry enough resilience to handle the closure of the Strait.
The bigger risk, he said, was if sustained high energy prices triggered broad inflation leading to recession and a drop in demand. He described a scenario of high costs, weak demand and overcapacity as “a dangerous cocktail”.
The Middle East situation also impacts shipping in the Red Sea, forcing Maersk to continue to reroute vessels around Africa, away from the Suez Canal and the Bab el-Mandeb Strait.
This marked an abrupt stop to Maersk’s tentative efforts for a gradual return of some services to the Suez route, seen as a key step towards ending years of global trade disruption caused by attacks on ships in the Red Sea by Yemen’s Houthi rebels.
Maersk is currently assessing whether conditions in the Red Sea will soon be safe enough to resume some sailings through Suez, which would significantly reduce fuel costs and transit times on the critical Asia-Europe corridor, Clerc said.
($1 = 6.3466 Danish crowns)
(Reporting by Stine Jacobsen and Jesus Calero, editing by Terje Solsvik and Alexander Smith)
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