Maersk expects container throughput to return to pre-epidemic levels next year
Maersk, the world's largest shipping company, announced a significant rise in operating profit in the second quarter in spite of a drop in global volumes due to the COVID-19 outbreak.Soren Skou, chief executive, also predicted that Maersk's cargo volume would return to pre-CoVID levels within a year.
"Our operating profit increased by 25 per cent, the eighth consecutive quarter of year-on-year growth, due to strong cost performance across all of our businesses, lower fuel prices and higher freight rates...And increased profitability [of logistics and services]."
Earnings before interest, tax, depreciation and amortisation were also strong, at $1.5bn, and profit margins were healthier than last year, in spite of a 6.5 per cent fall in revenues and a 16 per cent drop in freight volumes.Maersk offset the drop in revenue by idling or redeploying ships and cutting costs.Lower fuel prices and higher freight rates have also boosted performance.
The company now expects full-year earnings of between $6 billion and $7 billion, a pleasant surprise in challenging times, though demand is likely to fall this year.Maersk would like to see volumes start to recover this quarter and is optimistic that global trade will recover.
"We expect our sales to return to 2019 levels sometime in the first half of next year," Skou said at a news conference on Wednesday.
However, Skou also told the Financial Times that the company still faced "huge problems" common to all shipowners - the challenge of changing crews in the age of coronavirus.Maersk has pre-boarding quarantine and testing plans for incoming crew members to reduce the risk of introducing disease to the ship, but a third of the sailors it deploys are working beyond their contract terms."At first, the crew had a good mentality that they could make more money by staying longer.As time went on, we began to see more and more people feel mental fatigue.