During the third
quarter A.P. Moller - Maersk improved profitability across the business and
delivered strong free cash flow, despite the negative impact on global
economies from the COVID-19 pandemic.
Performance increase was based on a stringent costs control, among
The company grew earnings before interest,
tax, depreciation and amortisation (EBITDA) 39 pct. to USD 2.3bn with revenue
decreasing 1.4 pct. to USD 9.9bn. The performance increase was based on a
stringent costs control, agile capacity management, strong focus on customer
offerings with further traction in uptake of digital services, and some benefit
from a sequential demand recovery compared to the second quarter.
performance driver this quarter was Ocean which, despite decreasing volumes of
3.6 pct. improved profitability by USD 511m to USD 1.8bn, reaching an EBITDA
margin of 25.4 pct. on the back of a continued agile capacity deployment, lower
costs and a temporary spike in short-term freight rates due to a sudden demand
pick-up on some routes.
increased from 9.9 pct. to 13.9 pct
Cash return on
invested capital (CROIC), last twelve months, increased from 9.9 pct. to 13.9
pct. due to stronger cash flow from
operating activities and lower gross CAPEX. Return on invested capital (ROIC),
last twelve months, from 3 pct. to 5.9 pct. as earnings improved and invested
capital declined slightly.
The free cash flow
generation of USD 3.0bn in the first nine months of 2020, allowed the company
to return cash to shareholders, finance acquisitions and reduce debt with net
interest-bearing debt decreasing further to USD 10.8bn by the end of Q3
compared to USD 11.7bn by the end of 2019.
Throughout the pandemic, our
main priorities have been keeping our employees safe: Søren Skou CEO of A.P. Moller - Maersk.
Søren Skou adds:
“Throughout the pandemic, our main priorities have been keeping our employees
safe, keeping our global network and ports operating to serve our customers and
supporting the societies we are part of… however we remain well aware of the
high level of uncertainty the pandemic and associated lock downs continue to
pose in the coming quarters.”
For 2020, the
guidance on capital expenditures (CAPEX) is expected to be USD 1.5bn, and with
the expectation of a high cash conversion (cash flow from operations compared
For 2021-2022, the
accumulated guidance on capital expenditures is expected to be between USD
USD 5.5bn with the
expectation of a high cash conversion.