Maersk Raises Outlook as Shipping Giant Sees Demand Rebound

(Bloomberg) — A.P. Moller-Maersk A/S raised its full-year guidance amid a recovery in demand and sweeping efforts to cut costs.



a large ship in the background: Inside DP World Plc London Gateway Port


© Bloomberg
Inside DP World Plc London Gateway Port

The container shipping company, which is eliminating hundreds of jobs, said earnings before interest, taxes, depreciation and amortization will be in the range of $7.5 billion to $8 billion, before restructuring and integration costs. That compares with an earlier forecast of $6 billion to $7 billion, according to a statement.

Loading...

Load Error

“The upgrade underlines the strong earnings momentum,” Brian Borsting, a credit analyst at Danske Bank A/S, said in a client note.

Copenhagen-based Maersk, which transports about 15% of the globe’s seaborne freight, said there was a “continued recovery in demand” in the third quarter. It reported revenue of $9.9 billion for the quarter, and an EBITDA before costs of $2.4 billion.

Maersk is undertaking a major restructuring as the world’s biggest shipping company grapples with the effects of the Covid-19 pandemic. It’ll take restructuring costs of around $100 million in the third quarter related to around 2,000 job cuts, as it reorganizes its ocean and logistics and services operations.

Video: KBW CEO: Economic recovery is at 80% of pre-Covid levels (CNBC)

KBW CEO: Economic recovery is at 80% of pre-Covid levels

UP NEXT

UP NEXT

The almost 20% increase in the full-year EBITDA guidance means analysts are likely to materially upgrade their estimates, Jefferies analyst David Kerstens said in a note.

Read More: Maersk Plans Major Restructuring Affecting Thousands of Jobs

The upgrade could also be more good news for holders of Maersk debt, as the borrower may see a change in the negative outlook that it’s been assigned by S&P Global Ratings, according to Danske’s Borsting. Moody’s Investors Service already recently lifted its outlook to positive, he said.

Spreads on the company’s euro bonds maturing in March 2026 tightened 2.5 basis points to 102.3 while its shares fell 1.1%, according to levels compiled by Bloomberg at 9:30am local time.

(Updates to add analyst comments, bond and share pricing)

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

Continue Reading

Source Article

Author: iwano@_84