World’s Biggest Shipping Line Defies Crisis With Investor Pledge
A.P Moller-Maersk A/S, the world’s biggest shipping line, said it’s committed to rewarding shareholders and reassured the public that its own operations were uninterrupted by the fallout of the coronavirus.
Maersk, which controls about a fifth of the global container fleet, followed a string of other companies in suspending its outlook due to the uncertainty caused by the spread of the virus.
But first-quarter earnings are set to improve from a year earlier, as better cost controls outweigh declining freight volumes, the Copenhagen-based company said on Friday. Its shares soared as much as 13%, gaining more than benchmark stock indexes, which traded higher across the board.
Despite the economic threats posed by the coronavirus pandemic, Maersk said it’s continuing a share buyback program and will also keep paying out dividends to investors.
The announcement sends “a very strong signal” and shows that Maersk “is well capitalized,” Per Hansen an investment economist at Nordnet, said in a note.
Earnings before interest, tax, depreciation and amortization will probably be about $1.4 billion in the first quarter, up from $1.24 billion a year earlier, Maersk said. The increase is due to improved freight rates that compensate for higher oil costs.
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