Maersk, the Danish shipping behemoth, reported a massive decline in net profit for the first quarter on Thursday, citing Yemeni rebel attacks forcing it to skip the critical Red Sea routes.
Maersk recorded a net profit of $177 million in the first three months of this year, a 13-fold decrease from the same period last year.
Turnover declined 13 percent to $12.4 billion, slightly below than expected by FactSet analysts.
However, the company revised its full-year outlook, citing increasing demand as well as higher rates and costs as a result of Red Sea supply chain bottlenecks.
It now estimates an underlying core profit of $4 billion to $6 billion, up from $1 billion-$6 billion previously.
“We had a positive start to the year with a first quarter developing precisely as we expected,” Maersk chief executive Vincent Clerc said in a statement.
“Demand is trending towards the higher end of our market growth guidance and conditions in the Red Sea remain entrenched,” he said.
“This not only supported a recovery in the first quarter compared to the previous quarter, but also provide an improved outlook for the coming quarters, as we now expect these conditions to stay with us for most of the year.”
Iran-backed Huthi rebels, who control Yemen’s capital Sanaa and much of the country’s Red Sea coast, have conducted scores of strikes on ships since November, claiming solidarity with Palestinians caught up in the Israel-Hamas conflict.
In December, the United States unveiled a maritime security initiative to defend Red Sea commerce from attacks that have caused commercial vessels to divert from the route that regularly transports 12% of world trade.