Søren Skou, the CEO of A.P. Moller – Maersk, the world’s largest containerline, has warned volumes handled by the carrier could slump by as much as 25% during the current quarter.
Skou was speaking today at the unveiling of the Danish company’s solid Q1 results which saw earnings before interest, tax, depreciation and amortisation (EBITDA) improve 23% to $1.5bn compared to Q1 last year and revenue increase slightly to $9.6bn.
“Looking into Q2 2020, visibility remains low as a result of the Covid-19 pandemic,” Skou said today, adding: “We continue to support our customers in keeping their supply chains running, however as global demand continues to be significantly affected, we expect volumes in Q2 to decrease across all businesses, possibly by as much as 20-25%.”
Maersk stated today that the global market growth in demand for containers is expected to contract in 2020 due to Covid-19 whereas earlier, pre-pandemic foreasts had been predicting between 1% to 3% growth. Steps are being taken by the Copenhagen-headquartered company to reduce capex, it said today.
“2020 is a challenging year, but as we proactively respond to lower demands and show progress in our transformation and financial performance, we are strongly positioned to weather the storm,” Skou said.
Maersk’s suspension on full year guidance for 2020, announced on 20 March, remains, with the company saying today the Covid-19 pandemic continues to lead to “material uncertainty in the coming quarters”.
The Maersk bearish forecasts have been backed up today by the United Nations Conference on Trade and Development (UNCTAD), which released a report showing the coronavirus pandemic cut global trade values by 3% in the first quarter of this year.
The downturn is expected to accelerate in the second quarter, with global trade projected to record a quarter-on-quarter decline of 27%, according to the report by the Committee for the Coordination of Statistical Activities (CCSA).
“Everywhere governments are pressed to make post-Covid-19 recovery decisions with long-lasting consequences,” UNCTAD secretary-general Mukhisa Kituyi said.
Søren Skou: “This has been an unprecedented and extraordinary quarter due to the global COVID-19 pandemic. A.P. Moller-Maersk has focused on protecting our people, serving our customers and helping the societies, that we are a part of, to fight the virus.”#Maerskresults #Maersk pic.twitter.com/MxcZGuIR9y
— Maersk (@Maersk) May 13, 2020