Maersk Confident About Shipping Recovery Beyond 2020
Shipping group Maersk said on Wednesday it is confident about the outlook for shipping beyond 2020 as a second wave of coronavirus infections has only had a limited impact on global freight volumes.
Maersk, the world’s biggest container shipping line, has recovered faster than expected after the pandemic halted trade around the world, benefiting from higher retail sales in the United States.
“The second wave of coronavirus infections has had relatively limited impact on trade volumes,” Chief Executive Soren Skou told a news briefing after announcing third-quarter results in line with preliminary numbers published last month.
The company on Tuesday raised its full-year earnings forecast, citing increased momentum in the fourth quarter in global container volumes and freight rates.
Shipping executives last month warned that a rally in freight rates fueled by surging shipments into the United States could slow because of new COVID-19 lockdown measures.
“One thing we’ve learned is that it doesn’t really matter if a society is in lockdown or not, because consumers spend their money online instead of going to the mall,” Skou said.
“A lot of the money consumers haven’t been able to spend on holidays or at restaurants, bars or sporting events, have instead been spend buying things like flat screen TVs or new shoes,” he said.
While Skou forecasts global container volumes to contract by 4%-5% this year, he forecasts a return to normal next year with global container volumes slightly above 2019 levels.
Maersk also announced a new share buy-back program of up to 10 billion Danish crowns ($1.60 billion), a decision that was “supported by the strong earnings and free cash flow generation seen in 2020.”
In line with preliminary numbers announced last month, Maersk said third-quarter sales fell slightly from last year to $9.92 billion, while earnings before interest, tax, depreciation and amortization (EBITDA) rose 39% to $2.3 billion.
($1 = 6.2680 Danish crowns)
Reporting by Jacob Gronholt-Pedersen, editing by Louise Heavens/Barbara Lewis/Jane Merriman