Maersk to Lower CapEx, Consider Dividend Cuts to Retain Credit Rating

Maersk's Baa1 credit rating was put under review for a downgrade by Moody's in September, after it announced it would split up the company to focus on the shipping business and spin off its energy assets.

Last month, Standard & Poor's lowered the company's credit rating to BBB from BBB+ with a negative outlook.

"We would like to send a very clear message today that we are committed to remain investment grade rated," Chief Executive Soren Skou told investors at its capital markets day in Copenhagen on Tuesday.

Cheap financing was a key argument of having a diversified business, but as the Danish conglomerate is split up, it also becomes more exposed to the cyclical changes in the shipping industry.

Skou said the company aimed to reduce capital expenditure in its transport and logistics division from around $6 billion this year to $5.5 billion next year and $4 billion in 2018, while keeping new investments in its energy business at a minimum.

Maersk's energy business accounted for more than one-third of the company's EBITDA in the first nine months of the year.

"If it becomes necessary, we will also look at divestments and other cash flow enhancing measures," Skou said.

"Finally, our board will also consider the dividend in line with our policy," Skou said, noting that Maersk last reduced annual dividends to shareholders in 2009.

In its first major deal since the restructuring was announced in September, Maersk said this month it would buy German rival Hamburg Süd in a cash deal, although it did not disclose the value of the deal.

Maersk also said on Tuesday is targeting return on invested capital in its transport and logistics business at above 8.5 percent while at the same time growing revenue.