Maersk Eyes 4% Market Growth in 2025, Uncertainty over Tariffs and Red Sea

FILED - 10 January 2023, Baden-Wuerttemberg, Horb am Neckar: A container with the logo of A.P. Moller-Maersk Group stands at the Black Forest Terminal (BFT) site. Photo: Silas Stein/dpa

Maersk on Thursday said it expects to grow its business to track an expected 4% growth in container shipping this year, even as profits are set to decline and Trump's tariff threats create uncertainty.
Geopolitical developments including President Donald Trump's threats to impose tariffs on the top US trading partners and access to the Red Sea shipping route will impact Maersk's revenues.
Maersk, viewed as a barometer of world trade, said it expects an underlying EBITDA result of between $6 billion and $9 billion this year, compared with the $12.1 billion achieved last year and the $7.4 billion predicted by analysts.
The company said the wide forecast range hinged on the situation in the Red Sea, avoided by Maersk for over a year due to attacks by militants that forced vessels travelling between Europe and Asia took the longer route around Africa.
Maersk and rivals have benefited from longer sailing times and soaring freight rates as ships are rerouted around Africa as Houthi militants have kept up attacks on Red Sea vessels in what they say is in solidarity with Palestinians in Gaza.
A potential reopening of the Red Sea route by mid-year could drive down rates and result in Maersk hitting the lower end of its forecast range, while a later opening one could mean reaching the higher end, Maersk said.
"With negotiations for phase 2 of a (Gaza) ceasefire already under way, we see a meaningful risk of the group coming in at the lower end," Bernstein analysts said in a research note.
"The list of geopolitical strains on supply chains continues to expand with uncertainty over heightened tariffs on US imports as well as tighter export controls on critical goods, sanctions and a renewed interest in industrial policies," Maersk said in its earnings report.
"The impact of US tariffs will be larger depending on their level, the coverage of countries and goods, partners' retaliation and the risk of tariffs in third countries against Chinese manufactured goods as they look for new markets," Maersk said.
The company late on Wednesday announced a resumption of share buybacks and on Thursday posted stronger than expected profits for the October-December quarter, sending its share price up 10% by 0945 GMT.
The Danish company's underlying earnings before interest, tax, depreciation and amortization (EBITDA) rose to $3.60 billion in the fourth quarter from a year-ago $839 million, beating a $3.0 billion forecast by analysts in an LSEG poll.