AMKBY AP Moller Maersk AS (PK)

   By Dominic Chopping 
 

A.P. Moeller-Maersk A/S on Wednesday unveiled a 10 billion Danish kroner ($1.59 billion) share-buyback program after an earnings rebound as demand surged, coupled with higher freight rates and lower costs.

"A stronger-than-expected recovery in demand, following the slowdown of 2Q led to the reactivation of all available tonnage as well as significantly higher prices in the short-term market," said Chief Executive Soren Skou.

The Danish shipping giant late Tuesday upgraded full-year guidance for the second time in a month. It said it now expects full-year earnings before interest, tax, depreciation and amortization of $8 billion to $8.5 billion, compared with $7.5 billion to $8 billion previously.

Maersk on Wednesday posted a quarterly net profit attributable to shareholders of $927 million, compared with $506 million a year earlier, and shy of the $954 million seen in an analyst forecast from FactSet.

Revenue fell 1.4% to $9.92 billion, compared with the company's own guidance of $9.9 billion.

Maersk, which is considered a barometer of global trade, said shipping volumes fell 3.6%, against the company's guidance for a 3% drop, but this was more than offset by a lower cost base, reduced bunker cost from lower fuel prices, higher freight rates and lower bunker consumption. Average freight rates rose 4.4% on year.

Global container volumes increased by around 1% in the third quarter. Maersk said global demand growth for containers is expected to contract by 4% to 5% in 2020 because of the pandemic.

Organic volume growth in its main ocean unit is now expected to be slightly below the average market growth, compared with a previous view of growth in line with or slightly below the market, it said.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

November 18, 2020 03:08 ET (08:08 GMT)

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