The world’s largest container shipping company, A. P. Møller - Maersk A/S, has downgraded its profit forecast for 2018.
The change in expectations is due to increased uncertainty impacting container freight rates and bunker prices, which is reflected by the lower than predicted outcome.
A statement from the company revealed that profitability was negatively impacted by an average bunker price increase of 28%, compared to the same period last year while average freight rates were 1.2% lower.
Another factor influencing Maersk’s forecast is the potential damage that geopolitical risks - such as a burgeoning trade war between the U.S. and China – could have on the rate of exchange.
Søren Skou, CEO of A. P. Møller - Maersk A/S, commented on the new forecast: “We delivered good progress in Q2 on revenue, volumes and unit cost across our business, and results improved from a weak Q1.
“Spot freight rates have restored after a significant drop in Q2, and volumes are growing in line with market .
“However, we continue to encounter very high bunker prices, which we have not been able to get fully compensated for in freight rates, leading to an adjustment in our expectations for the full-year 2018.”