Maersk has announced its Q2 2020 financial results, reporting improved profitability across all businesses despite the sharp drop in global volumes following the COVID-19 crisis.
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to $1.7bn, which is higher than the initial expectations in the trading update from June of an EBITDA slightly above $1.5bn. The EBITDA margin increased from 14.1% in Q2 2019 to 18.9% in Q2 2020.
Revenue decreased by 6.5% year-on-year, totalling $9bn. The decline was primarily driven by a volume decrease of 16% in the Ocean segment and a 14% year-on-year decrease in gateway terminals. In Ocean, the lower volumes were partly offset by the capacity deployment of the global network leading to lower costs, together with lower fuel prices and higher freight rates.
Logistics & Services reported revenue of $1.6bn, down 0.6% year-on-year. EBITDA, more than doubled $97m ($46m: Q2 2019), with the decline in volumes more than offset by spikes in air freight forwarding rates, margin optimisation in intermodal and the acquisition of Performance Team in April 2020. Terminals & Towage showed resilience by compensating lower volumes through cost measures.
“As expected, the second quarter was materially impacted by COVID-19 and our focus remained on protecting our employees from the virus, serving our customers by keeping our global network of ships sailing and our ports, warehouses and inland transportation networks operating and helping the societies we are part of fight the virus,” said Søren Skou, CEO of Maersk.
Maersk suspended the full-year guidance for 2020 (EBITDA before restructuring and integration costs of around $5.5bn) on March 20, 2020, due to the COVID-19 pandemic.
Despite the uncertainties related to COVID-19, Maersk reinstates its full-year guidance for 2020 and now expects EBITDA to be between $6.0bn to $7.0bn, before restructuring and integration costs.
The 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. Organic volume growth in Ocean is expected to be in line with or slightly lower than the average market growth.
The outlook and guidance for 2020 is subject to significant uncertainties related to the COVID-19 pandemic and does not take into consideration a material second lockdown phase. The guidance is also subject to uncertainties related to freight rates, bunker prices and other external factors.
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