A.P. Moller-Maersk A/S, the world’s largest container line, reinstated its full-year guidance at a higher level than it had previously indicated, after staying open for business throughout the COVID-19 crisis.
Shares in the company soared as much as 7.4 percent when trading began in Copenhagen yesterday.
Earnings before interest, taxes, depreciation and amortization (EBITDA) this year would be between US$6 billion and US$7 billion, the company said in a statement.
Photo: Reuters
Before suspending its guidance earlier this year, Maersk had expected profit by that measure to reach about US$5.5 billion.
Analysts surveyed by Bloomberg had predicted US$5.83 billion, on average.
“We were able to continue to serve our customers’ global transportation needs and supply chains throughout the quarter under very difficult circumstances,” Maersk chief executive officer Soren Skou said in the statement. “We were never closed for business.”
The company slashed operating costs by 16 percent in the quarter which, together with a 4.5 percent rise in freight rates, more than offset a 16 percent drop in volumes.
Frode Morkedal, a managing director at shipping firm Clarksons Platou in Oslo, said Maersk’s results suggest that the container shipping market is proving more robust in the face of the COVID-19 crisis than many had feared.
“In our view, freight rates are performing better than expected in 3Q despite liner companies adding back ship capacity to trade lanes, an indication of a stronger demand recovery than expected,” Morkedal wrote in a client note. “We continue to favor Maersk as a recovery bet and we remain constructive to the container-ship market outlook, and see earnings upgrades likely to further support the stock price.”
However, Skou said that the company’s outlook does not include the possibility of a “material” second phase of lockdowns.
He also said that “significant uncertainties remain on demand growth due to COVID-19, global supply growth and bunker prices.”
“Global demand growth for containers is still expected to contract in 2020 due to COVID-19 and for Q3 2020 volumes are expected to progressively recover with a current expectation of a mid-single digit contraction,” Maersk said.
Maersk, which transports about 15 percent of the world’s seaborne freight, reported a second-quarter EBITDA of US$1.7 billion, close to the highest analyst estimate.
The company said on June 17 that the second quarter was developing better than first feared and that EBITDA was expected to be “slightly above” US$1.5 billion.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure