DANISH
shipping giant AP Moller-Maersk A/S has raised its
full-year guidance amid a surprise recovery in demand and sweeping efforts to
cut costs.
The
container shipping company, which is eliminating hundreds of jobs, said
earnings before interest, taxes, depreciation and amortization will be in the range of US$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.
"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 per cent of the globe's seaborne freight,
said there was a "continued recovery in demand" in the third quarter.
Maersk said it had anticipated a bigger contraction in its main ocean unit than
materialised.
Volumes
fell by around 3 per cent in the third quarter from a year earlier, while the
company said it had expected a "mid single-digit contraction". As a
result Maersk reported revenue of $9.9 billion and an Ebitda before costs of
$2.4 billion for the quarter, reports Bloomberg.
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 reorganises its ocean and logistics and services operations.
The
almost 20 per cent increase in the full-year Ebitda guidance means analysts are
likely to materially upgrade their estimates, Jefferies analyst David Kerstens
said in a note.
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.
Source
: HKSG.
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