Danish ship and liner operator Maersk has reported good results for 2020 and in an investors’ presentation has hinted at ammonia and methanol as being future fuel choices.
“2020 will forever be remembered for the COVID-19 pandemic that negatively impacted our lives, jobs, businesses and the global economy. I am proud that we have accelerated our transformation and delivered earnings growth during every quarter of 2020, despite very different market conditions, beginning with negative COVID-19 impact in the first half to a rebound in Q4,” said Søren Skou, CEO of A.P. Moller – Maersk.
The company grew underlying earnings before interest, tax, depreciation and amortisation (EBITDA) 44%. to $8.2bn and revenue grew to $39.7bn in 2020 compared to $38.9bn last year. While the demand surge in the second half of year created supply chain bottlenecks, including vessel and container shortages, and led to higher rates that contributed approximately $1.5bn to results, Ocean further improved its intrinsic performance by focusing on costs, agile capacity management and launching new digital offerings.
Logistics & Services grew to $7bn, compared to $6.3bn last year, and EBITDA improved 110%. to $454m, supported by the acquisition of Performance Team as well as improved performance in intermodal, air freight forwarding and warehousing and distribution.
During the presentation Skou said the company was planning to replace some of its older fleet and keep its market share growing its Ocean business in line with the market growth but was not planning an early ordering spree. “We have to replace our tonnage, every day our older fleet gets older, and there will be some replacement work, but you should not expect anything dramatic,” he said.
On future fuels where Maersk has taken a keen interest in developing and trialling in recent years, Skou said, “In terms of Capex guidance and fuel technology, we are still working on figuring out what is the best fuel for us for the future. The alternatives that we are looking at are fuels like alcohols, ammonia and so on, which basically can be used in combustion engines. So, that means that if we end up finding exactly the right solution there then would be a big retrofit opportunity for us. Of course, there are already marketed engines in the world that run on methanol, and ammonia engines are under development. I’m sure they will be more expensive than the ones we have today. However, it’s not like we’re seeing a huge mountain of Capex coming our way because of engine technology, especially if we end up where we think we will end up with ammonia or methanol as a future fuel.”