Maersk upgrades expectations as CMA CGM sell bonds

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Maersk upgrades expectations as CMA CGM sell bonds

Maersk say they are on course for „a strong Q3 with solid earnings„, followed by another „solid Q4”. Meanwhile, fellow shipping giant CMA CGM have declared their intention to refinance their debt by selling off bonds.

Like so many other companies in the logistics sector, Maersk have bounced back in Q3 having been buoyed by a rise in demand post-lockdown. Søren Skou, CEO of A.P. Moller – Maersk, says that his company’s situation has improved thanks to volumes rebounding faster than expected:

“A.P. Moller – Maersk is on track to deliver a strong Q3 with solid earnings growth across all our businesses, in particular in Ocean and Logistics & Services. Volumes have rebounded faster than expected, our cost have remained well under control, freight rates have increased due to strong demand and we are growing earnings rapidly in Logistics & Services. The outlook for Q4 is solid for the same reasons, and we are therefore able to upgrade our expectations for the full year.

However, the company warns that the outlook for 2021 is still uncertain:

The outlook for 2021 remains uncertain due to the ongoing pandemic. The positive impact from stimulus packages may be less strong in 2021, potential new lock downs will impact demand and the timing and effectiveness of a potential vaccine will impact 2021.”

When it comes to Q3, Maersk’s official press release says the company achieved an unaudited revenue of USD 9.9bn and an EBITDA before its restructuring and integration costs of USD 2.4bn. Maersk’s volumes in Ocean declined by around 3% in Q3 2020 compared to 2019, which is a few percent lower than the company had anticipated.

However, Maersk also admit that their restructuring plans will cost in the region of USD 100m in Q3 and result in 2,000 employees being made redundant.

Meanwhile, Maersk’s shipping competitors CMA CGM are reportedly planning to sell off bonds to refinance their debt. According to Bloomberg,  CMA CGM will sell $619.3 million of senior unsecured notes due in 2026. In an email seen by Bloomberg, CMA CGM declare that the proceeds from the bonds will be used to pay of all of its outstanding 7.75% senior notes due in January.


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