Global shipping giant Maersk (CPH:MAERSK-B) has suspended its 2020 full-year guidance on earnings citing the “severe impact” of COVID-19 on international transport market and supply chains.
CEO Søren Skou said in a statement that global container demand uncertainties and governments’ measures to contain the virus have resulted in Maersk suspending its 2020 full-year guidance on earnings.
“Because of the current situation with high uncertainties related to global container demand due to the COVID-19 pandemic and the measures being taken by governments to contain the outbreak, we have chosen to suspend our 2020 full-year guidance on earnings but will as soon as we have more clarity return with an outlook for 2020,” Skou said.
“Ensuring the health and well-being of our employees and supporting our customers’ needs remain our number one priority.”
Skou said the suspension of the guidance on earnings before interest, tax, depreciation and amortization (EBITDA) comes due to material uncertainties and lack of visibility related to global container transport due to the COVID-19 situation.
However, Skou said, the company is expecting to deliver “better” Q1 2020 results compared to Q1 2019 in part because of cost mitigation regarding its International Maritime Organization (IMO) 2020 implementation strategy to cut emissions
“During the first two and a half month of 2020 we have executed well on our IMO2020 strategy for how to manage the extra cost involved with the IMO mandated switch to low-sulphur fuel oil from Jan. 1,” Skou said.
“We have effectively mitigated a part of the extra cost through good procurement, blending and manufacturing fuel ourselves and we have implemented rate increases to recover the actual fuel price increase from customers. We consequently expect to deliver a Q1 2020 which is better than Q1 2019, despite declining volumes across our businesses, driven by the COVID-19 pandemic.”
For 2020, Maersk previously guided an EBITDA of around US$5.5 billion, before integration and restructuring costs.