- Maersk announced a significant increase in operating earnings in Q2.
- Forecasts to see a return to pre-COVID cargo volume levels within a year’s time.
- Operating earnings improved by 25 % marking the eighth consecutive quarter with year-on-year improvements.
- EBITDA was also strong at $1.5 billion for the quarter, despite a 6.5 % drop in revenue and a cargo volume decrease of 16 %.
- The carrier now forecasts full-year earnings in the range of $6-7 billion though demand is likely to be down for the year.
- Firm still faces a “massive problem” shared by all shipowners – the challenge of crew change in the coronavirus era.
Maersk announced a significant increase in operating earnings in the second quarter, despite the global drop in volume due to the COVID-19 pandemic, reports The Maritime Executive.
Pre-COVID cargo volume levels reached
CEO Soren Skou announcing its significant increase in operating earnings in the second quarter also forecast that Maersk would see a return to pre-COVID cargo volume levels within a year’s time.
Skou said in a statement:
“Our operating earnings improved by 25 percent, marking the eighth consecutive quarter with year-on-year improvements, driven by strong cost performance across all our businesses, lower fuel prices and higher freight rates . . . and increased profitability in [logistics and services].”
Revenue drop balanced
EBITDA was also strong at $1.5 billion for the quarter, with healthier margins than last year – despite a 6.5 percent drop in revenue and a cargo volume decrease of 16 percent. Maersk offset the revenue drop by laying up or redeploying ships, cutting costs. Lower bunker prices and higher freight rates also boosted performance.
Full-year earnings forecast
The carrier now forecasts full-year earnings in the range of $6-7 billion – an enviable number in a challenging era – even though demand will likely be down for the year. Maersk hopes to see volume recovery beginning this quarter, and it is optimistic about the world’s return to trading.
Skou said, “Our expectation is that some time during the first half next year we will have volumes back at the level we had in 2019.”
Still a major problem
Crew change
Skou also said that the firm still faces a “massive problem” shared by all shipowners – the challenge of crew change in the coronavirus era.
Seafarers working beyond contracts term
Maersk has created a preboarding quarantine and testing program for oncoming crewmembers, reducing risk of introducing the disease to a ship, but a third of its currently-deployed seafarers are working beyond the term of their contracts.
Mental fatigue
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.”
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Source: Maritime Executive
