Shipping group A.P. Moller-Maersk warned on Wednesday lower container volumes and freight rates would drive a four-fold plunge in profits this year, even as it reported record earnings for 2022.
The Copenhagen-based company, which transports goods for retailers and consumer companies such as Walmart, Nike and Unilever, raised its profit forecast twice last year as a surge in consumer demand and pandemic-related logjams at ports boosted freight rates.
But freight rates have since tumbled as recession looms and pandemic-fuelled import bubbles deflate in the United States and other major consuming countries.
This year, Maersk expects global demand for shipping containers by sea to fall by as much as 2.5% as a build up in inventories is unwound.
The company expects underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) of $8-11 billion in 2023, compared with $36.8 billion last year.
The forecast was below the $11.9 billion expected by analysts in a company poll.
Maersk shares dropped 5% in early trading.
"Guidance for 2023 is based on the expectation that inventory correction will be complete by the end of the first half, leading to a more balanced demand environment," it said.
Maersk, one of the world's biggest container shippers with a market share of around 17%, said freight rates fell by nearly a quarter in the fourth quarter versus the previous three months.
Underlying EBITDA stood at $6.52 billion in the quarter compared with $7.99 billion a year earlier and the $6.95 billion forecast by analysts in the company poll.
Revenues dipped to $17.8 billion as the number of containers it loaded on to ships fell by 14%.