Maersk profit forecast raised although 2,000 redundancies planned

Maersk profit forecast raised although 2,000 redundancies planned
Full year 2020 EBITDA of US$7.5-8.0bn is now expected

Maersk has upgraded its profit forecast for 2020 based on preliminary Q3 figures and the current outlook for Q4, with its ocean business benefitting from a faster rebound than expected as well as high freight rates.

Full year 2020 EBITDA is now expected to be between US$7.5-8.0bn before restructuring and integration costs, after previously being estimated at US$6.0-7.0bn.

However, the shipping company has confirmed it will make around 2,000 employees redundant as part of its latest restructuring, which features the retirement of its Safmarine and Damco brands.

Maersk expects to take a restructuring charge of around US$100m in Q3 2020 as a result of the lay offs.

Søren Skou, CEO of A.P. Moller – Maersk, said: “A.P. 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 has 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 company has reported an unaudited revenue of US$9.9bn and an EBITDA before restructuring and integration costs of US$2.4bn for Q3 2020.

This provisional result was driven by a continued recovery in demand and our initiatives to improve cost, noted the company in a statement.

Volumes declined by around 3% in the third quarter of the year compared to Q3 2019, which is slightly better than the anticipated mid-single digit contraction.

Skou added: “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.”