Danish shipping giant Maersk experienced a substantial downturn in net profit during the first quarter of the year, largely attributed to the challenges posed by ongoing attacks from Yemeni rebels, which have prompted the company to reroute vessels away from the critical Red Sea passage.

In the latest financial report released on Thursday, Maersk disclosed a stark decline in net profit, plummeting to $177 million for the year’s initial three months. 

This figure represents a staggering 13-fold drop compared to last year’s corresponding period. 

Concurrently, the company’s turnover also witnessed a notable decrease of 13 percent, amounting to $12.4 billion, marginally below the projections outlined by analysts surveyed by financial data firm FactSet.

Despite the formidable hurdles encountered, Maersk presented an optimistic outlook for the remainder of the fiscal year, buoyed by heightened demand and adjustments in rates and costs in response to the supply chain disruptions witnessed along the Red Sea corridor. 

The corporation revised its full-year forecast, anticipating an underlying core profit between $4 billion and $6 billion, marking a notable increase from the previously estimated range of $1 billion to $6 billion.

The recurrent disruptions along the Red Sea route are attributed to Iran-backed Huthi rebels, who maintain control over Yemen’s capital, Sanaa, and a significant portion of the country’s Red Sea coastline. 

Since November, the rebels have orchestrated numerous attacks on maritime vessels, purportedly in solidarity with Palestinians amidst the Israel-Hamas conflict. 

In response to the escalating threats, the United States unveiled a maritime security initiative in December aimed at safeguarding Red Sea shipping from such attacks, which have compelled commercial fleets to divert from the route that traditionally facilitates 12 percent of global trade.