Richard Milne, Nordic and Baltic
A mix of cost cuts, higher freight rates and lower oil prices helped AP Moller-Maersk report a 25 per cent increase in second-quarter earnings, before interest, tax, depreciation and amortisation, to $1.7bn from the same period a year ago.
The better than expected earnings came despite a 10 per cent fall in global demand for containers — a proxy for global trade growth — as well as a 16 per cent fall in volumes in its shipping business.
After suspending its full-year guidance in March due to coronavirus, Maersk reinstated it on Wednesday at a higher level. Previously, it had expected ebitda to be about $5.5bn for 2020 before restructuring and integration costs but it now forecasts $6bn-$7bn, higher than last year’s $5.7bn.
Since the pandemic erupted, crews have faced problems getting off vessels and home due to closed borders and a lack of commercial flights, leading container shipping executives to sound the alarm on safety.
Maersk chief executive Soren Skou told the Financial Times that the group was working hard on solving the issue of stranded seafarers by creating hubs for crew members in Manila and Mumbai where it hired hotels so they could quarantine before being flown on special flights to Denmark and elsewhere where they are tested for coronavirus.
Two-thirds of Maersk’s workers in July had been onboard their ships for longer than their contract but that was now down to one-third or about 2,000 people, Mr Skou said.
“Initially, people took this in good spirit and thought they would earn a bit more by being out a bit longer. As time went on, we started to see more and more mental fatigue. That is not good when you’re on board a ship,” he added.
Mr Skou also noted that the improved results were Maersk’s eighth straight quarter of year-on-year improvements after it struggled initially following the big demerger of its energy assets from its shipping business.
Container demand has rebounded since April when it fell about 20 per cent, according to Mr Skou. He said he expected the fall in the third quarter to be about 4-6 per cent and that “some time in 2021” it would be back to 2019 levels.
“If you compare with the global financial crisis we saw an even deeper contraction [minus 17 per cent in the first quarter of 2009] but we saw a rebound in the following year. Now things are moving up,” he added.