Continued demand recovery and cost improvements buoy up bottom lines
AP Moller - Maersk is changing its full-year guidance for 2020 based on preliminary Q3 figures and the current outlook for Q4.
The company now reports an unaudited revenue of $9.9 billion and an EBITDA before restructuring and integration costs of $2.4 billion for Q3 2020, driven by a continued recovery in demand and initiatives to improve cost.
Volumes in Ocean declined by around 3% in Q3 2020 compared to previous year, which is slightly better than the anticipated mid-single digit contraction.
Søren Skou, CEO of A.P. Moller - Maersk said: “AP Moller - Maersk is on track to deliver a strong Q3 with solid earnings growth across all our businesses, in particular in Ocean and Logistics & Services.
"Volumes have rebounded faster than expected, our cost have remained well under control, freight rates have increased due to strong demand and we are growing earnings rapidly in Logistics & Services.
"The outlook for Q4 is solid for the same reasons, and we are therefore able to upgrade our expectations for the full year.
The outlook for 2021 remains uncertain due to the ongoing pandemic. The positive impact from stimulus packages may be less strong in 2021, potential new lock downs will impact demand and the timing and effectiveness of a potential vaccine will impact 2021.”
A.P. Moller - Maersk expects to take a restructuring charge of around $100 million in Q3 2020 related to the redundancies of approx. 2,000 employees as the consequence of the changes to the organisation in Ocean and Logistics & Services announced on September 1, 2020.
Given the result in Q3 2020 and the current earnings momentum the company sees across businesses, the full year 2020 EBITDA is now expected to be in the range of $7.5-8 billion, before restructuring and integration costs (previously $6-7 billon). All other parameters of the guidance released on August 19th remain unchanged.
Trading conditions for the quarters ahead remain subject to a higher than normal uncertainty given the disruptions caused or potentially being caused by COVID-19.
Maersk will publish its Q3 interim result on 18 November 2020.