AMKBY AP Moller Maersk AS (PK)

By Dominic Chopping

Denmark's A.P. Moeller-Maersk AS reported results for the fourth quarter on Wednesday. Here's what we watched:

REVENUE: Revenue rose 16% to $11.26 billion against the $10.91 billion expected in a FactSet analyst poll.

EARNINGS: The Danish shipping giant posted a quarterly net profit attributable to shareholders of $1.3 billion, compared with a loss of $72 million a year earlier, and against the $1.39 billion seen by a consensus of analyst forecasts on FactSet. Demand surged in the quarter while freight rates spiked due to bottlenecks across the entire supply chain, including a shortage of ships and containers.

WHAT WE WATCHED:

VOLUMES AND RATES: Maersk, which is considered a barometer of global trade, said shipping volumes rose 3.2% in the fourth quarter and average freight rates surged 18%, while fuel costs fell 14% on the year. "Ocean performed at record level in the quarter as a consequence of the strong rebound of demand which led to full capacity utilization but also to bottlenecks, higher costs and difficulties in meeting our customer reliability promises," Chief Executive Soren Skou said.

GUIDANCE: Organic volume growth in its main ocean unit is expected to be in line with global container demand at an expected 3%-5% in 2021, with the highest growth expected in the first-half of the year. Maersk expects underlying earnings before interest, tax, depreciation and amortization in 2021 at between $8.5 billion-$10.5 billion from $8.3 billion in 2020, with underlying EBIT of $4.3 billion-$6.3 billion from $4.2 billion in 2020, and free cash flow above $3.5 billion versus $4.2 billion in 2020. For 2021-22, accumulated capital expenditure is still expected at $4.5 billion-$5.5 billion. Maersk proposed a dividend of DKK330 a share for 2020, up from DKK150 in 2019.

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

(END) Dow Jones Newswires

February 10, 2021 09:14 ET (14:14 GMT)

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