Maersk lifts profit outlook for 2020

Copenhagen

AP MOLLER-MAERSK A/S, the world's largest container line, reinstated its full-year guidance at a higher level than it had previously indicated, after staying open for business throughout the Covid-19 crisis.

Shares in the company soared as much as 7.4 per cent when trading started in Copenhagen on Wednesday.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) in 2020 will be between US$6 billion and US$7 billion, the company said. Before suspending its guidance earlier this year, Maersk had expected profit by that measure to reach around US$5.5 billion. Analysts surveyed by Bloomberg had predicted US$5.83 billion, on average.

"We were able to continue to serve our customers' global transportation needs and supply chains throughout the quarter under very difficult circumstances," chief executive officer Soren Skou said in the statement. "We were never closed for business."

The company slashed operating costs by 16 per cent in the quarter which, together with a 4.5 per cent rise in freight rates, more than offset a 16 per cent drop in volumes.

But Mr Skou warned that the company's current outlook doesn't include the possibility of a "material" second phase of lockdowns. He also said that "significant uncertainties remain on demand growth due to Covid-19, global supply growth and bunker prices".

"Global demand growth for containers is still expected to contract in 2020 due to Covid-19 and for Q3 2020 volumes are expected to progressively recover with a current expectation of a mid-single digit contraction," Maersk said on Wednesday.

Maersk, which transports about 15 per cent of the world's seaborne freight, reported a second-quarter Ebitda of US$1.7 billion, close to the highest analyst estimate. BLOOMBERG