Shipping giant Maersk shares slide 12% after suspending share buybacks amid Red Sea disruption

Shares of a shipping company dropped over 11% after it highlighted uncertainty in its 2024 earnings outlook. The company cited disruptions in the Red Sea and an oversupply of shipping vessels as the main factors. As a result, the company suspended its share buyback program. It anticipated underlying EBITDA between $1 billion and $6 billion this year, compared to $9.6 billion in 2023. The company reported fourth-quarter profits below expectations, with EBITDA for the period dropping to $839 million. The diversions in the Red Sea have caused delays and increased costs in global supply chains. The OECD warned about potential inflationary consequences due to rising seaborne freight rates. Despite the increased rates, the company’s CEO believes it will not significantly impact profits and the full extent of the costs incurred is still unknown.