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Maersk suspends 2020 EBITDA guidance on COVID-19 uncertainty

Photo: Maersk sorenskou.jpg
One of the world’s largest shipowners AP Moller – Maersk has suspended its full year financial guidance in the light of the uncertainty of the impact of the COVID-19 pandemic.

Releasing a Q1 trading update Maersk said that while operations continued to run as normal due to the uncertainties related to outlook it had decided to suspend its EBITDA guidance for 2020 until there was more clarity on market developments and financial implications.

Søren Skou, ceo of AP Moller – Maersk said: “Because of the current situation with high uncertainties related to global container demand due to the COVID-19 pandemic and the measures being taken by governments to contain the outbreak, we have chosen to suspend our 2020 full year guidance on earnings but will as soon as we have more clarity return with an outlook for 2020.  Ensuring the health and well-being of our employees and supporting our customer’s needs remain our number one priority.”

Maersk had previously given guidance of $5.5bn EBITDA for 2020. In terms of other guidance which has not been suspended Maersk expects volume growth for its ocean to be in line with or slightly lower than market growth. CAPEX remains at $3 – 4bn for 2020-21 but the company said it would take measures to reduce CAPEX in 2020.

For Q1 2020 Maersk an EBITDA before restructuring and integration costs of around $1.4bn compared to $1.24bn in the same period in 2019.

“During the first two and a half month of 2020 we have executed well on our IMO2020 strategy for how to manage the extra cost involved with the IMO mandated switch to low-sulphur fuel oil from January 1st. We have effectively mitigated a part of the extra cost through good procurement, blending and manufacturing fuel ourselves and we have implemented rate increases to recover the actual fuel price increase from customers,” Skou said.

“We consequently expect to deliver a Q1 2020 which is better than Q1 2019, despite declining volumes across our businesses, driven by the COVID-19 pandemic.”

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