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Robert.Jervis_43227 Mar 20

Maersk trading update

Maersk trading update image
“We expect to deliver a Q1 2020 which is better than Q1 2019”
Based on preliminary figures, A.P. Møller - Mærsk A/S (APMM) expects EBITDA before restructuring and integration costs for Q1 to be around USD 1.4bn (USD 1.24bn) negatively impacted by weak volume development but mitigated by strong implementation of our IMO 2020 strategy, both in terms of cost reduction initiatives and fuel price recovery.  
 
For 2020, APMM has previously guided an EBITDA of around USD 5.5 bn, before restructuring and integration costs. The global COVID-19 pandemic severely impacts the global transport market and supply chains. This is leading to material uncertainties and lack of visibility related to the global demand for container transport. While the global operations are running as normal, APMM has, as a consequence of the current uncertainties related to the outlook, decided to suspend the 2020 guidance on EBITDA pending more clarity on the market development and financial implications.
 
The remaining part of the guidance for 2020 of volume growth in Ocean expected to be in line or slightly lower than the market growth, a high cash conversion ratio and accumulated CAPEX for 2020-21 of between USD 3-4bn is reiterated, but measures will be taken to reduce CAPEX for 2020.
 
The ongoing share buy-back program as well as proposed dividends for 2019 will not be affected by the decision to suspend guidance.
 
“During the first two and a half months 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. 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.
 
“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” says Søren Skou, CEO A.P. Moller - Maersk.
 
APMM will publish its Q1 result on 13 May 2020.
 
Separately, the Board of Maersk has proposed that Blythe Masters is elected as new member of the Board of Directors.
 
Blythe Masters (born 1969) is an English national and she holds a BA in Economics from Trinity College, Cambridge, United Kingdom.
 
Blythe Masters is currently industry Partner at Motive Partners (New York) a specialty FinTech private equity and venture capital firm. From 2015 to 2018 she was CEO at Digital asset Holdings LLC, a blockchain company, and prior to that she was Managing Director at J. P. Morgan Chase & Co, New York.
 
In addition to her current position, Blythe Masters is Member of the International Advisory Board of Santander Group, Board Member of Santander Open Digital Services, Board Member and Audit Committee Chair of Phunware Inc., Advisory Board Member of US Chamber of Digital Commerce, Advisory Board Member of Figure Technologies, Inc., Advisory Board Member of Maxex, LLC, Member of IMF High Level Advisory Group on Finance and Technology, Member of Brookings Institution Taskforce on Financial Stability and Member of P.R.I.M.E. Finance (the Hague-based Panel of Recognized International Market Experts in Finance).
 
“I am delighted to welcome Blythe Masters to the Board of Directors of A. P. Møller - Mærsk. She adds critical capabilities to the board in line with our strategic priorities to digitalize the industry and become the global integrator of container logistics”, says Jim Hagemann Snabe, Chairman of the Board of Directors.
 
Blythe Masters will contribute with an international outlook and experience within financial services and technology, having extensive knowledge in start-ups and blockchain