The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
AP Moller-Maersk A/S raised its full-year guidance amid a surprise recovery in demand and sweeping efforts to cut costs.
The container shipping company, which is eliminating hundreds of jobs, said earnings before interest, taxes, depreciation and amortization will be in the range of $7.5 billion to $8 billion, before restructuring and integration costs. That compares with an earlier forecast of $6 billion to $7 billion, according to a statement.
“The upgrade underlines the strong earnings momentum,†Brian Borsting, a credit analyst at Danske Bank A/S, said in a client note.
Copenhagen-based Maersk, which transports about 15% of the globe’s seaborne freight, said there was a “continued recovery in demand†in the third quarter. Maersk said it had anticipated a bigger contraction in its main ocean unit than materialised.
Volumes fell by around 3% in the third quarter from a year earlier, while the company said it had expected a “mid single-digit contraction.†As a result Maersk reported revenue of $9.9 billion and an EBITDA before costs of $2.4 billion for the quarter.
Maersk is undertaking a major restructuring as the world’s biggest shipping company grapples with the effects of the Covid-19 pandemic. It’ll take restructuring costs of around $100 million in the third quarter related to around 2,000 job cuts, as it reorganizes its ocean and logistics and services operations.
The almost 20% increase in the full-year EBITDA guidance means analysts are likely to materially upgrade their estimates, Jefferies analyst David Kerstens said in a note.