Maersk Q2 revenue falls as pandemic cuts container volumes by 16% on year

Houston — Danish shipping firm A.P. Moller-Maersk recorded a drop in second-quarter revenue as demand destruction from the coronavirus pandemic reduced the company's container volumes by 16% year on year.

But higher shipping rates and lower fuel costs limited the impact and helped it to beat its own expectations for the quarter, the company said in its earnings release on Aug. 19.

Maersk's revenue fell to $9 billion in April-June 2020 from $9.6 billion for the same period last year. The company's revenue from its ocean shipping segment fell by 8.7% year on year to $6.6 billion in the second quarter.

Total second-quarter earnings before interest, tax, depreciation and amortization (EBITDA) was $1.7 billion, a year-on-year increase of 34% and above the company's second-quarter EBITDA guidance of $1.5 billion from June.

Maersk had a total April-June container volume of 2.9 million forty-foot equivalent units, or FEUs, down by 16% year on year. But this drop in demand was "partly offset by agile capacity deployment of the global network leading to lower costs, together with lower fuel prices and higher freight rates," the company said.

Many container ship owners responded to demand destruction amid the pandemic with voyage cancellations that allowed them to consolidate operating costs in an uncertain economic environment. These capacity reductions lifted the Platts Container Index from $1,089.49/FEU at the start of the second quarter to $1,199.36/FEU on June 30. The index was last assessed at $1,430.22/FEU on Aug. 18.

Maersk achieved an average freight rate of $1,915/FEU across its fleet in the second quarter, up by 4.5% from the same period last year.