World’s top shipper expects virus outbreak to hurt earnings

Business

Workers wearing protective gears spray disinfectant as a precaution against the new coronavirus at Agricultural and Wholesale Products Center in Daegu, South Korea, Thursday, Feb. 20, 2020. The mayor of the South Korean city of Daegu urged its 2.5 million people on Thursday to refrain from going outside as cases of a new virus, linked to a church congregation, spiked and he pleaded for help from the central government. (Kim Hyun-tae/Yonhap via AP)

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COPENHAGEN, Denmark (AP) — The world’s largest shipping company, Denmark’s A.P. Moller-Maersk, said Thursday it expects the outbreak of the new coronavirus in China to hurt its 2020 earnings.

The company said in its annual earnings report that the 2020 outlook “is subject to significant uncertainties and impacted” by the coronavirus outbreak, “which has significantly lowered visibility on what to expect in 2020.”

“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.”

China is a key market for the shipper.

Mainland China has reported 2,118 deaths and 74,576 total cases. While the overall spread of the virus has been slowing, the situation remains severe in Hubei province and its capital, Wuhan, where the new coronavirus was first detected in December. More than 80% of the country’s cases are in Hubei and 95% of the deaths, according to official figures.

The company issued the warning as it reported earnings for 2019, with revenue declining slightly to $38.9 billion from $39.3 billion. In the fourth quarter, revenue dropped to $9.7 billion from $10.2 billion.

CEO Soeren Skou noted that despite weaker market conditions and global container growth of only 1.4%, the Copenhagen-based group “was able to improve profitability and cash flow.”

Separately, airline Air France estimated Thursday that the halt of flights to China and the wider impact on business from the virus outbreak will cost it 150-200 million euros ($165-220 million) in operating earnings for the Feb-April period.

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