Proactive Investors - Maersk (LON:0O77), the shipping company, saw its shares trade around 14% lower after it suspended its share buyback programme as a result of continued disruptions in the Red Sea.
Earnings targets for 2024 have been flagged with “high uncertainty” due to the Houthi attacks on the shipping route and the oversupply of vessels.
Underlying earnings are therefore expected to be between US$1 billion and US$6 billion for the 2024 financial year, representing a steep decline from 2023’s US$9.6 billion.
Vincent Clerc, the Danish company’s chief executive officer, said: “The ongoing disruptions and market volatility emphasize the need for supply chain resilience, further confirming that Maersk's path toward integrated logistics is the right choice for our customers to effectively manage these challenges.
“We have very little visibility as to whether this is a situation that will resolve in a matter of weeks or months, or whether this is something that is going to be with us for the full year,” he told reporters.
Fourth-quarter EBITDA fell to US$839 million, lower than analysts’ estimates of US$1.3 billion.
Yemen’s Houthi rebels have been launching attacks on shipping vessels in the Red Sea using drones and missiles for several months now in what the rebel group describes as an act of solidarity with Palestinians amid the war in Israel/Gaza.