Giant gantry cranes and off loading freighter in Haifa container port, Israel.
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LONDON — Shares of Danish shipping giant Maersk slumped more than 14% in early trade Thursday after it flagged “high uncertainty” in its 2024 earnings outlook amid Red Sea disruptions and an oversupply of shipping vessels.
The company also said that it would be suspending share buybacks on the back of the uncertainty.
Maersk said it expected underlying EBITDA (or earnings before interest, tax, depreciation and amortization) of between $1 billion and $6 billion this year, compared to the $9.6 billion recorded in 2023.
Shares were trading 13.5% lower at 9:00 a.m. London time.
“The impact of this situation is causing new uncertainty for how this is going to play out from an earnings perspective throughout the year,” CEO Vincent Clerc told CNBC’s “Squawk Box Europe.”
“We have very little visibility as to whether this is a situation that will resolve in a matter of weeks or months, or whether this is something that is going to be with us for the full year,” he added.
In a statement, the company added that its board had decided to “immediately suspend the share buy-back programme, with a re-initiation to be reviewed once market conditions in Ocean [division] have settled.”
It comes as the company reported fourth-quarter profit below expectations Thursday, with EBITDA for the three-month period dropping to $839 million versus the $1.13 billion anticipated by analysts.
Global supply chains have faced serious disruption since late 2023 after major shipping companies began diverting journeys away from the Red Sea following a string of attacks by Yemen’s Houthi rebels.
The Iran-aligned group has targetted commercial vessels with drones and missiles in what they say is an act of solidarity with Palestinians amid the ongoing Gaza-Israel war.
The diversions around one of the world’s busiest shipping lanes have pushed up delivery times and costs, with the OECD
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