Shipping giant Maersk reported a significant revenue drop of 26 per cent today, down from $19.3bn (£15.4bn) to $14.2bn (£11.31bn) year on year, as the freight and shipping sector saw demand fall sharply.
The Copenhagen-based group said profitability for the quarter was “significantly lower” compared to last year, amid low demand and challenging economic circumstances.
“We delivered a solid financial performance in a challenging market with lower demand caused by continued destocking.” Vincent Clerc, CEO of Maersk, said. “Visibility remains low for the remainder of the year and moving through this market normalisation, we remain focused on proactively managing costs.”
First quarter operating profits came in ahead of analyst expectations at $2.3bn, though represented a significant drop on the previous year, when Maersk took in $7.3bn
Despite this, the firm was still able to shell out $10.1bn in cash to shareholders in the form of dividends and share buybacks.
The revenue dip comes after the pandemic-era boom, which saw the shipping sector reach record profits thanks to a dramatic shift in consumption patterns during lockdowns.
Recession fears and a drop in demand have now seen freight rates fall back to previous levels, leaving the sector facing a slump.
“As we adjust to a radically changed business environment, we continue to support our customers in addressing their supply chain challenges. We are pleased to note that customers continue to value the integrated logistics solutions and close partnership we provide,” Clerc said.