- Maersk has laid off around 2,000 employees in relation to the organizational changes that shut down brands Damco and Safmarine.
- Combined with increased demand, this makes Maersk upgrade its full-year guidance for 2020.
- The outlook for 2021 remains uncertain due to the ongoing pandemic and the positive impact from stimulus packages may be less strong in 2021.
- The potential new lock downs will impact demand and the timing and effectiveness of a potential vaccine will impact 2021.
A.P. Moller – Maersk is changing its full-year guidance for 2020 based on preliminary Q3 figures and the current outlook for Q4, reads a Maersk press release.
Job cuts due to organizational change
Maersk revealed that it will make around 2,000 staff redundant due to changes to the organisation linked to the integration of Damco into its Ocean Logistics business and the removal of the separate Safmarine brand, which it announced last month.
In a trading update for its third-quarter (Q3) 2020 performance and 2020 full year guidance adjustment, Maersk said it “expects to take a restructuring charge of around US$100m in Q3 2020 related to the redundancies of approximately 2,000 employees as the consequence of the changes to the organisation in Ocean and Logistics & Services announced on 1 September 2020.”
A solid Q4!
With parent group A.P. Moller-Maersk announcing its was upgrading its full-year guidance for 2020 based on preliminary Q3 figures and the current outlook for Q4, Søren Skou, CEO of A.P. Moller – Maersk said: “A.P. Moller – Maersk is on track to deliver a strong Q3 with solid earnings growth across all our businesses, in particular in Ocean and Logistics & Services.”
He added, “Volumes have rebounded faster than expected, our cost have remained well under control, freight rates have increased due to strong demand and we are growing earnings rapidly in Logistics & Services.”
Continued demand and cost improvement
- The outlook for Q4 is solid for the same reasons, and therefore able to upgrade the expectations for the full year.
- The outlook for 2021 remains uncertain due to the ongoing pandemic.
- The positive impact from stimulus packages may be less strong in 2021, potential new lock downs will impact demand and the timing and effectiveness of a potential vaccine will impact 2021.
The company reported an unaudited revenue of US$9.9bn and an EBITDA before restructuring and integration costs of US$2.4bn for Q3 2020, “driven by a continued recovery in demand and our initiatives to improve cost.”
COVID uncertainties
Volumes in Ocean declined by around 3% in Q3 2020, compared to the previous year, “which is slightly better than the anticipated mid-single digit contraction,” the group said.
“Given the result in Q3 2020 and the current earnings momentum we see across the businesses, the full year 2020 EBITDA is now expected to be in the range of US$7.5-8.0bn, before restructuring and integration costs (previously USD 6.0-7.0bn). All other parameters of our guidance released on August 19 remain unchanged,” the group added.
But it said that trading conditions for the quarters ahead “remain subject to a higher than normal uncertainty given the disruptions caused or potentially being caused by COVID-19.”
A.P. Moller-Maersk will publish its Q3 interim result on 18 November 2020.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Maersk
