PortandTerminal.com, May 13, 2020
“In the past quarter – the first quarter of 2020 – we have become even more convinced at A.P. Moller Maersk that we are on the right path financially. But also to become the global integrator of container logistics” Søren Skou
COPENHAGEN – A.P. Moller – Maersk is reporting a strong financial start to the year despite the COVID-19 pandemic’s profound impact on global trade.
The company released its first-quarter results for 2020 which you can download a copy of by clicking here or by clicking on the Q1 image below in the next section of this article.
Q1 2020 highlights are follows:
- Revenue essentially flat at $9.57 billion
- Core earnings (EBITDA) grew by 23%
- CAPEX was reduced almost in half to $310 million
“In the first quarter of the year, A.P. Moller – Maersk again delivered profitable growth. Operating earnings increased by 23% year-on-year, and cash return on invested capital increased by 3.5 percentage points to
“The strong results were made during a quarter with sharp fuel cost increases derived from the industry’s switch to low-sulphur fuel and on the backdrop of a contraction in global trade due to lockdowns in most regions.“
“From the beginning of the COVID-19 crisis our focus has been on the health and well-being of our employees, on supporting our customer’s businesses and the societies we are part of,” says Søren Skou, CEO of A.P. Moller – Maersk.
Guidance for 2020
The suspension on full-year guidance for 2020, announced on 20 March, remains, as the COVID-19 pandemic continues to lead to material uncertainty in the coming quarters.
But Mr. Skou said in his main scenario, business would bottom out in the second quarter followed by a relatively weak third quarter and a partial recovery in the last three months of the year.
Highlights looking ahead
- Q2 volumes to decrease as much as 20-25% across the board
- Demand for containerized shipping expected to contract vs the previously forecast organic growth of 1-3%.
- CAPEX for 2020-2021 remains unchanged
A.P. Moller – Maersk CEO Søren Skou had this to say about the near future
“Looking into Q2 2020, visibility remains low as a result of the COVID-19 pandemic. We continue to support our customers in keeping their supply chains running, however as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%.”
“2020 is a challenging year, but as we proactively respond to lower demands and show progress in our transformation and financial performance, we are strongly positioned to weather the storm,”
“The global market growth in demand for containers is expected to contract in 2020 due to COVID-19 (previously between 1-3% growth). Organic volume growth in Ocean is expected to be in line with or slightly lower than average market growth. The accumulated guidance on CAPEX for 2020-2021 on USD 3.0 – 4.0bn is unchanged, with steps being taken to reduce CAPEX in 2020. A high cash conversion (cash flow from operations compared to EBITDA) is expected for both years.“
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