Maersk loses US$44m in 2019 despite flat liftings of 26.6m TEU

THE Maersk Group lost US$61 million in the fourth quarter of 2019, leading to an overall net loss of $44 million last year

24 February 2020 - 19:00

THE Maersk Group lost US$61 million in the fourth quarter of 2019, leading to an overall net loss of $44 million last year.

Top line revenue from operations was down slightly on the previous year, at $38.9 billion, with the contribution from ocean unchanged at $28.4 billion, reported London's Loadstar.

Liner liftings remained flat at 26.6 million TEU, and its average rate per TEU was unchanged at $940, despite bringing in IMO2020 surcharges in Q4.

Chief executive Soren Skou warned analysts that the first-quarter 2020 results would be 'significantly impacted' by the coronavirus outbreak.

With 50 sailings from China cancelled, Mr Skou said earnings in February would be 'really, really weak,' and that even if production and intermodal recovered quickly, March would be 'difficult.'

Nevertheless, Mr Skou said there could be a 'V-shaped recovery' from April onwards when the market would see a significant surge in demand from the backlog of pent-up orders.

'If we end up with a V-shaped recovery then we could see an overshooting in the later part of Q2,' said Mr Skou.

If necessary, he said, Maersk would deploy extra sailings, sourced from the charter market, to cater for the additional demand.

Mr Skou also spoke of the challenge of IMO2020 and recovering the extra costs of having to use low sulphur fuel from shippers.

For the carrier's spot cargo, which now represents half of its liftings, Mr Skou said surcharges had been successfully implemented. For contracts, Maersk is halfway through its negotiations and Mr Skou said it was a case of 'so far, so good' - but he did have some concerns about the remaining contract negotiations, coming in a 'weak environment.'

In Maersk's terminals and towage segment, revenue rose by 3.2 per cent to $3.9 billion, with turnover from its gateway terminals up 4.1 per cent to $3.2 billion.

However, logistics and services saw revenue drop to $6 billion, down from $6.1 billion the previous year, as the 'extraordinary' volumes of fourth quarter 2018 gained from the front-loading of cargo to beat US tariffs on Chinese goods, were not repeated.

Maersk has also announced the $545 million acquisition of US-based warehouse distribution and logistics firm Performance Team which it said formed a 'strategic component towards becoming a global integrator.'

Maersk said it expected an ebitda of $5.5 billion this year, before restructuring and integration costs, but warned that the 2020 outlook was 'subject to significant uncertainties,' particularly if the coronavirus outbreak was not brought under control worldwide.


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