Maersk stock slides after Q2 profit plunge amid red sea disruptions

Investing.com -- Maersk's (CSE:MAERSKb) shares fell on Wednesday following its second-quarter earnings report. 

At 5:11 am (0911 GMT), Maersk was trading 1.6% lower at DKK 10,430.

The company's profit fell 45.1% compared to last year. This is mainly due to ongoing disruptions in global supply chains caused by the Red Sea crisis.

Despite reporting a significant improvement in EBIT margin to 7.5% from 1.4% in the first quarter, the overall profitability fell sharply compared to the same period last year. 

The Red Sea crisis has led to increased operating costs and necessitated rerouting of shipping lanes, notably impacting Maersk.

“Market demand has been strong, and as we have all seen, the situation in the Red Sea remains entrenched, which leads to continued pressure on global supply chains,” said Vincent Clerc, chief executive at Maersk in a statement.

"These conditions are now expected to continue for the remainder of the year,” he added. 

The company said it saw volume growth across all segments, including ocean, logistics and services, and terminals. However, the pressures from the Red Sea situation have overshadowed these gains. 

Increased freight rates and supply chain disruptions have compounded costs, affecting the company’s bottom line despite operational improvements.

Maersk has raised its financial outlook for 2024 due to strong market demand and ongoing supply chain disruptions. However, geopolitical tensions continue to impact profitability.