- Maersk has delivered a respectable Q3 results with improved profitability despite the Covid-19 pandemic having a negative impact on the global economy.
- The shipping group reported a Q3 revenue of $9.9bn, down 1.4% year-on-year, and EBITDA up 39% to $2.3bn.
- The main performance driver for the quarter was the container shipping business under the Ocean sector.
- This was attributed to continued agile capacity deployment, lower costs and a temporary spike in short term freight rates due to a sudden demand pick-up on some routes.
A.P. Moller – Maersk (Maersk) improved its profitability across the business and delivered strong free cash flow, despite the negative impact on global economies from the COVID-19 pandemic during Q3, reports a news release by the company.
The company said its earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 39% to $2.3billion with revenue decreasing 1.4% to $9.9 billion.
Solid Q3 earnings
The performance increase was based on a stringent costs control, agile capacity management, strong focus on customer offerings with further traction in uptake of digital services, and some benefit from a sequential demand recovery compared to the second quarter.
“Despite COVID-19 negatively affecting activities in most of our businesses, our disciplined execution of the strategy led to solid earnings and cash flow growth in Q3,” said Søren Skou, Maersk’s CEO.
He added, “At the same time, we managed to further integrate and simplify the organisation in Ocean & Logistics, we closed the acquisition of KGH Customs Services and continued the integration of Performance Team, supporting our strong financial performance in Logistics & Services.”
The main performance driver this quarter was Ocean which, despite decreasing volumes of 3.6% improved profitability by $511 million to $1.8 billion, reaching an EBITDA margin of 25.4% on the back of a continued agile capacity deployment, lower costs and a temporary spike in short-term freight rates due to a sudden demand pick-up on some routes.
Logistics & Services revenue see an uptick
In the quarter, revenue in Logistics & Services grew 11% and profitability increased by 44%, achieving an EBITDA of $131 million up from $91 miliion in 2019, despite restructuring costs of USD 40 millon. In Terminals & Towage, our effort to become a world-class operator enabled us to continue to expand margins and grow earnings, despite lower volumes and revenue.
Søren Skou further said: “Throughout the pandemic, our main priorities have been keeping our employees safe, keeping our global network and ports operating to serve our customers and supporting the societies we are part of. This continues to be our focus as demand has begun to partially recover.“
“Our progress in earnings and in our transformation allows us to look confidently past the extraordinary 2020, however we remain well aware of the high level of uncertainty the pandemic and associated lock downs continue to pose in the coming quarters,” he concluded.
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Source: Maersk
