Maersk Reports Decline in Q1 Profit Due to Yemeni Rebel Attacks

Danish shipping giant Maersk recorded a significant decline in net profit for the first quarter, attributing it to Yemeni rebel attacks that have necessitated the avoidance of the crucial Red Sea route.

In the first three months of the year, Maersk reported a net profit of $177 million, marking a 13-fold drop compared to the same period last year. Turnover also decreased by 13 percent to $12.4 billion, slightly below analysts’ expectations.

Despite the challenging conditions, Maersk revised its full-year outlook upwards, citing increased demand and higher rates and costs due to disruptions in the supply chain along the Red Sea. The company now anticipates an underlying core profit ranging between $4 billion and $6 billion for the year, compared to the previous forecast of $1 billion-$6 billion.

Vincent Clerc, Maersk’s chief executive, expressed optimism about the company’s performance, stating that the first quarter unfolded as anticipated. He highlighted a growing demand trend and the persistent challenges in the Red Sea region, which contributed to a recovery in the first quarter and provided a more positive outlook for the coming quarters.

Huthi rebels, with alleged backing from Iran, have been targeting ships in the Red Sea since November, purportedly in solidarity with Palestinians amid the Israel-Hamas conflict. These attacks have prompted commercial vessels to divert from the route, which typically handles 12 percent of global trade.

In response to the escalating threats, the United States announced a maritime security initiative in December to safeguard Red Sea shipping. Maersk anticipates that the challenging conditions in the region will persist throughout the year, shaping its outlook for future quarters.