By Nikolaj Skydsgaard COPENHAGEN, March 20 (Reuters) – Cost-cutting and price rises will help Maersk deliver higher first-quarter earnings than a year ago, the shipping giant said on Friday, though it scrapped its full-year forecast due to uncertainty caused by the coronavirus pandemic.
The Danish company said its guidance on earnings before interest, tax and amortisation (EBITDA), previously $5.5 billion for the year, was suspended until further notice.
Preliminary results showed it made first-quarter EBITDA of around $1.4 billion.
Despite lower volume growth, Maersk said savings and steps to offset the higher cost of low-sulphur fuel had buoyed earnings. The company announced a round of job cuts in November.
“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,” chief executive Soeren Skou said in a statement.
Maersk shares were up more than 9% in early trading.
The company said it mitigated higher fuel costs by making and blending its own fuel, as well as passing the cost on to its customers.
Its ongoing share buy-back programme as well as proposed dividends for 2019 would not be affected by its decision to scrap financial guidance, Maersk said.
The company expects volume growth in its main Ocean division to be roughly in line or slightly lower than the market growth, while it reiterated its forecast for capital spending of $3-4 billion.
It said it would take further measures to reduce spending in 2020.
Rival container shipping company Hapag-Lloyd said on Friday the coronavirus pandemic would curb business growth until at least the middle of the year. (Reporting by Nikolaj Skydsgaard; editing by Jason Neely and Mark Potter)
(c) Copyright Thomson Reuters 2019.This article contains reporting from Reuters, published under license.
Sign up for gCaptain’s newsletter and never miss an update
Essential maritime and offshore news, insights, and updates delivered daily straight to your inbox
At nearly 40 years old, Lars Jensen’s Volkswagen camper van appeals to him mostly for its lack of modern features. The vehicle he calls “Sally” is just the right rig to drive around Africa over the next 18 months to explore the world’s most promising supply chain frontier.
The U.S. Federal Maritime Commission has secured a $1.9 million civil penalty settlement from Danish shipping giant A.P. Moller – Maersk over allegations the carrier improperly billed third parties for detention charges...
The U.S. Department of Justice has indicted four of the world’s largest shipping container manufacturers and seven senior executives in what prosecutors describe as a sweeping global conspiracy to restrict...
Subscribe to gCaptain Daily and stay informed with the latest global maritime and offshore news
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
