A.P. Moeller-Maersk (Maersk), the largest container shipping line in the world, has warned that 2020 will be an uncertain year due to the coronavirus, implementation of IMO 2020 and continued macroeconomic difficulties.
The warning was issued in Maersk’s 2019 results, in which it cited the extended Lunar New Year in China for having “significantly lowered visibility on what to expect in 2020”.
Coronavirus has been the biggest story for the global economy so far in 2020 and has caused fears of major disruption throughout the supply chain.
At the time of writing, it has killed more than 2,100 people since the first cases were reported in late-December 2019.
It has caused factories to close for far longer than normal and significant inhibitions placed on vessels from China. One of the country’s biggest river ports, Wuhan, the centre of the outbreak, has also been quarantined.
How did Maersk perform in 2019?
Maersk’s financial results reported a 14% increase in its earnings before interest, tax, depreciation and amortisation (EBITDA).
The EBITDA spike was achieved despite what Maersk called “weaker market conditions and global container growth of only 1.4%”.
Its revenue decreased slightly to $38.9 billion from $39.3 billion in 2018.
Ocean was by far its biggest segment and enjoyed an EBITDA increase of 15%, despite a drop in volumes.
Logistics’ revenue decreased but its gross profit increased by 8.7%; inland revenue fell due to lower volume in India.
However, Maersk did enjoy a bounce in its Terminals and Towage segment, where revenue and EBITDA both grew on 2018 by 4.1% and 11% respectively.
“While we still need to improve returns, we delivered solid progress in our financial performance in 2019 while progressing the business transformation, in spite of weak trade growth, ongoing trade tensions and geopolitical uncertainty in many markets,” explained Søren Skou, Maersk CEO.