S&P Global Ratings affirmed the issuer credit and issue ratings of A.P. Møller - Mærsk A/S at BBB and removed them from CreditWatch with negative implications, citing the newly established clarity on the shipping giant's future financial policy and shareholder remuneration plans.
Maersk on May 24 unveiled plans to repurchase shares of up to 10 billion Danish kroner over a 15-month period starting in June. The company's board also approved a new dividend policy with an annual payout ratio of 30% to 50% of the underlying net result.
But in affirming Maersk's ratings, S&P Global Ratings also retained caution on the outlook for freight rates and flagged demand risks stemming from the ongoing trade dispute between the U.S. and China, which Maersk also warned about in its first-quarter earnings report.
The outlook on Maersk's ratings is stable, S&P Global Ratings said, reflecting its expectations that the company will maintain above-industry-average profit margins and boost its credit metrics due to conservative capital spending and prudent shareholder returns over the next two years.
S&P Global Ratings expects Maersk's earnings to improve through 2020, with its adjusted EBITDA seen increasing to a range of $5.8 billion to $5.9 billion this year from $5.7 billion in 2018, before rising further to a range of $6.2 billion to $6.3 billion next year.
As of May 28, US$1 was equivalent to 6.68 Danish kroner.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.