Maersk unveils disappointing full-year income guidance

By Scott Kanowsky 

Investing.com -- AP Moeller-Maersk A/S (CSE:MAERSKb) has delivered lower-than-expected annual income guidance, citing an easing in a pandemic-era boom in demand for goods and expectations for sluggish global growth in 2023.

The Danish shipping firm now sees full-year underlying earnings before interest, tax, depreciation and amortization in the range of $8 billion to $11 billion, below Bloomberg consensus estimates of $13.45B.

"Guidance is based on the expectation that inventory correction will be complete by the end of H1 leading to a more balanced demand environment, that 2023 global GDP growth remains muted, and that the global ocean container market will grow in a range of -2.5% to +0.5%," Maersk said in a statement.

The outlook includes an impairment and restructuring charge of $450 million in the first quarter, it added.

Analysts at Citi flagged that the disappointing forecast will likely fuel downgrades to consensus expectations for the company's future performance.

Copenhagen-listed shares in the business fell in early trading on Wednesday.

In the fourth quarter of 2022, higher costs and lower volumes contributed to an 18.4% decrease in core income to $6.5B, although this came in above estimates of $6.42B. Its key ocean transport division - responsible for more than 90% of Maersk's returns in the prior quarter - was particularly impacted, with earnings sliding by over a sixth to $6.03B. This decline was partially offset by strength in its logistics and services unit.

"Overall, the businesses performed well in an environment of receding demand and rising inflation," Maersk said.