The world’s largest shipping company AP Moller Maersk warned it could make an operating loss next year. That was despite posting FY25 revenue and profit at the top end of market expectations.
| Share price: DKK 15,095 (-5.6%) | PE: 12.4x |
| Market Cap: $36.5bn | Yield 2.9% |
RECORD FY25 RESULTS
Maersk delivered a ‘strong’ performance in 2025, with growth across all its businesses, said CEO Vincent Clerc. Volume growth, sound execution and proactive cost measures helped results hit the top end of financial guidance.
The Danish firm, which operates over 700 vessels, said Ocean revenue grew 4.9% last year ‘despite volatile markets’. Meanwhile, the Terminals business achieved its strongest ever financial results with record volumes, revenue and EBIT.
The Ocean business saw an uptick in volumes in Q4, but continued pressure on freight rates pushed it into losses. The Terminals business also saw an uptick in volumes, but equally profits were impaired.
POTENTIAL LOSS IN FY26
For the current year, Maersk CEO Clerc sees further pricing pressure in the Ocean business. A combination of overcapacity and the opening of the Red Sea could push the firm as a whole into losses.
New capacity coming to the market caused an average 23% drop in freight rates in Q4. Maersk sees container market volumes growing by 2% to 4% this year, but to avoid losses it has to cut costs.
If sailings resume through the Red Sea, it will dramatically reduce the journey time between Europe and Asia. That could free up more vessels on this lucrative route after a two-year hiatus, adding to pressure on rates.
Due to the uncertainty over profits for FY26, the firm has reduced the size of its share buyback. It will now repurchase $1 billion of stock this year, down from $2 billion in FY25, while laying off staff.
If the world’s biggest freight mover is worried about the outlook for 2026, everyone should be worried. It’s not just overcapacity and lower rates which are affecting the business but confidence in the global economy.
US firm United Parcel Services (UPS), which is the world’s largest parcel handling company, forecast flat earnings for FY26. It is so concerned about profits it has announced up to 30,000 job cuts to cushion its bottom line.
Read the press release here: https://investor.maersk.com/
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