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Maersk warns of ‘significant uncertainties’ from coronavirus

Owner of the world’s largest container line, AP Moller – Maersk, says its $5.5bn EBITDA guidance is subject to “significant uncertainties” from the coronavirus (Covid-19) and the implementation of IMO 2020.

Reporting an EBITDA of $5.7bn for 2019, and a bottomline profit of $509m for the year, Maersk issued an EBITDA guidance of a slightly lower $5.5bn, before restructuring and integration costs, for 2020.

It said that organic growth for its ocean business (container shipping) would be slightly lower than the estimated average market growth of 1-3% for 2020.

However, Maersk also cautioned on significant uncertainties in the outlook based on the impact of the coronavirus and the impact of IMO 2020 on fuel prices.

“The outlook and guidance for 2020 is subject to significant uncertainties and impacted by the current outbreak of the Coronavirus (Covid-19) in China, which has significantly lowered visibility on what to expect in 2020. As factories in China are closed for longer than usual in connection with the Chinese New Year and as a result of the Covid-19, we expect a weak start to the year,” Maersk said.

Analyst SeaIntelligence has estimated that container lines as whole were losing $300m - $350m in revenues a week due to suspended sailings from China.

Maersk also cautioned on the impact of IMO 2020 which saw prices rocket for compliant very low sulphur fuel oil (VLFSO) in the first few weeks of the regulation coming into force on 1 January 2020.

“The guidance for 2020 is also subject to uncertainties related to the implementation of IMO 2020 and the impact on bunker fuel prices and freight rates combined with the weaker macro-economic conditions and other external factors,” the Danish company said.

Read all Seatrade Maritime News coverage on the impact of the coronavirus on shipping

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