Global integrated container logistics company A.P. Moller - Maersk posted improved earnings and free cash flow for 2019, despite weaker market conditions and global container growth of only 1.4 percent.
However, the Danish business conglomerate said that the coronavirus (COVID-19) would hit its earnings this year as the world's largest container shipping company warned of a "very weak" start to the year.
The company expects an EBITDA of around USD 5.5bn, before restructuring and integration costs. The organic volume growth in Ocean is expected to be in line with or slightly lower than the estimated average market growth of 1-3% for 2020.
"The outlook and guidance for 2020 is subject to significant uncertainties and impacted by the current outbreak of the Coronavirus in China, which has significantly lowered visibility on what to expect in 2020," it said.
As factories in China are closed for longer than usual in connection with the Chinese New Year and as a result of the Coronavirus, we expect a weak start to the year.
The guidance for 2020 is also subject to uncertainties related to the implementation of IMO 2020 and the impact on bunker fuel prices and freight rates combined with the weaker macroeconomic conditions and other external factors, it said.
The accumulated guidance on CAPEX for 2020-21 is still USD 3-4bn. A high cash conversion (cash flow from operations compared to EBITDA) is expected for both years.