Maersk Reinstates Upbeat Guidance Despite Sharp Drop In Container Volumes
Maersk has reinstated full-year guidance above its forecast at the beginning of the year, even as the shipping group expects demand for moving containers at sea to remain below normal levels in the third quarter.
Maersk, which handles one in every five containers shipped by sea worldwide, posted second-quarter revenue and earnings above expectations, as a sharp drop in volumes was partly offset by higher freight rates, lower fuel prices and lower costs in the quarter.
"I am pleased that we despite the headwinds, continued our track record of improving earnings and free cash flow. Our operating earnings improved by 25%, marking the eight-consecutive quarter with year-on-year improvements, driven by strong cost performance across all our businesses, lower fuel prices and higher freight rates in Ocean and increased profitability in Logistics & Services," commented chief executive Soren Skou.
"With a strong result and a strong balance sheet we are well positioned to financially and strategically come out stronger of the crisis.”
Maersk said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) at $6-$7 billion before restructuring and integration costs, compared to the $5.5 billion forecast at the beginning of the year.
Global demand for containers is still forecast to decline this year compared to last year, with a mid-single digit contraction in the third quarter, Maersk said.
EBITDA rose 25% to $1.7 billion in the second quarter, above the 1.6 billion forecast by analysts in a Refinitiv poll.
Revenue fell 7% to $9.0 billion in the period, compared to the expected $8.9 billion.