One of Maersk Line’s largest ships, the Maersk Murcia, in the port of Gothenburg: The line’s parent company, ` Møller-Maersk, warned on Wednesday of growing economic risks © AFP via Getty Images
` Møller-Maersk on Wednesday warned of growing economic risks, including possible stagflation and Chinese factory closures, even as the container shipping giant reported a record quarter.
Søren Skou, Maersk CEO, told the Financial Times that the current second quarter has developed very similarly to the first three months, which have produced the highest profits in the Danish group’s 114-year history.
But he added: “We expect a slowdown in the second half, a normalization. Visibility is pretty low. Mainly we see risks in the economy, in China with the Covid-19 policy where they are using these very tough lockdowns, some downgrades due to a very high oil price.”
Maersk, which transports more than one in six containers transported by sea, is considered a pioneer in global trade. It last week downgraded its growth forecast for the shipping industry this year to a possible small contraction.
The company also raised its earnings guidance for this year to $24 billion in underlying operating income, up from its February estimate of $19 billion. “The momentum we have right now is enough to carry out our upgrade,” Skou said on Wednesday.
Still, Skou noted that some economists are forecasting a US recession later in the year, although it’s “too early” to say.
“There are a number of factors that suggest that we will see slower growth in the second half and next year,” he said, citing falling consumer and business confidence in Europe and the US and falling Chinese export orders .
Maersk suffered from declining volumes due to a “stunning” sixth week of lockdown in Shanghai, Skou said. But it wasn’t dramatic.
The company’s after-tax income for the first quarter was $6.78 billion compared to $2.7 billion for the same quarter in 2021.
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