A.P. Moller-Maersk is the largest container carrying company in the world.
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Shipping giant Maersk warned on Thursday that the coronavirus outbreak would weigh on earnings this year, blend the woes of a container shipping industry already subdued by trade wars and an economic slowdown.
Maersk, which examined a lower-than-expected fourth-quarter profit on Thursday, forecasted a weak start to the year because factories in China were closely guarded for longer than usual after the Chinese New Year holiday.
“Weekly container vessel calls at key Chinese harbours were significantly down compared to last year during the last weeks of January and the first weeks of February,” Maersk, the world’s fattest container shipping firm, said in a statement.
It reiterated, however, a forecast for growth in global container demand of 1% to 3% this year, bring up Chief Executive Soren Skou remained optimistic of a rebound in the second quarter. Global container demand grew 1.4% in 2019 and 3.8% the year in the future.
“The outlook for 2020 is impacted by the current outbreak of the coronavirus in China, which has significantly lowered visibility on what to conjecture in 2020,” Maersk said.
The company’s shares fell slightly in opening trade but quickly reversed their impairments and traded up 3.8% at 0723 GMT.
“The market had already priced in a negative impact from the coronavirus outbreak and it looks have a weakness for they had priced in a bit too much in the case of Maersk,” said Sydbank analyst Mikkel Emil Jensen of the rise.
“In supplement, I believe that Maersk is also getting some kudos for the acquisition they announced yesterday,” he added.
Maersk chance on Wednesday it had agreed to buy U.S. warehousing and distribution firm Performance Team as part of plans to deliver more customized logistics outcomes.
The coronavirus epidemic has thrown the global container shipping trade off balance, with lines re-routing cargoes and decrease calls to Chinese ports, setting the scene for months of delivery delays.
Maersk said fourth-quarter earnings ahead interest, tax, depreciation and amortization (EBITDA) totaled $1.46 billion, lagging the $1.51 billion forecast by 24 analysts in a consensus voting compiled by Maersk.
The shipping firm said it expected 2020 EBITDA of $5.5 billion, compared to $6.0 billion thought by analysts and the $5.7 billion achieved last year.
The Copenhagen-based company, which handles one in every five containers shipped by sea worldwide, indicated the price customers such as Walmart and Nike pay for delivery of sea-borne containers is likely to fall as a result of the coronavirus.