Maersk Shipping: Corona Virus has a big impact on income

AP Moller - Maersk Group announced improved earnings and free cash flow in 2019, despite weaker market conditions and global container shipping growth of only 1.4%.

However, the Danish conglomerate says that the Corona virus will affect earnings this year when the world's largest container carrier warned of a "very weak" start earlier this year.

Maersk expects earnings before interest, taxes, depreciation and amortization (EBITDA) to be at US $ 5.5 billion, before taking into account the costs of restructuring and integration. Organic growth in shipping volume is expected to be similar or slightly lower than the average market growth estimate of 1-3% for 2020.

"The direction and perspective for 2020 must take into account the significant instability and the effects of the Corona virus outbreak in China, which has greatly reduced the prospects for what is expected in the year. 2020, "said Maersk.

As factories in China have closed longer than usual, which is related to the Chinese New Year and as a result of Corona virus, we think this year will start with a weak start.

The direction for 2020 must also take into account the uncertainties associated with the implementation of IMO 2020 and impact on fuel prices and freight rates along with weaker macroeconomic conditions and factors. Other external, Maersk adds.

The direction on capital cost (CAPEX) for 2020-21 is still 3-4 billion USD. A high cash conversion (cash flow from operating activities comparable to EBITDA) is expected for both years.

Phaata (Source: MarineLink)

PHAATA.com – The First International Logistics Marketplace in Vietnam