Despite the impact of the rampaging COVID-19 on business since the beginning of the year, A.P. Moller-Maersk has reported an improved profitability across all businesses in the second quarter of 2020, in spite of the sharp drop in global volumes.

According to the shipping line, earnings before interest, tax, depreciation, and amortisation (EBITDA) improved to $ 1.7 billion, beating initial expectations from June of an EBITDA slightly above $ 1.5 billion.

The EBITDA margin increased from 14.1% in Q2 last year to 18.9%.

The Danish shipping and logistics major ascribed earnings boost to agile capacity deployment, cost mitigation initiatives and adaptation to changed customer needs.

“I am pleased that despite the headwinds, we continued our track record of improving earnings and free cash flow. Our operating earnings improved by 25%, marking the eighth consecutive quarter with year-on-year improvements, driven by strong cost performance across all our businesses, lower fuel prices and higher freight rates in Ocean and increased profitability in Logistics & Services,” says Søren Skou, CEO of A.P. Moller–Maersk.

The CEO added that revenue decreased by 6.5% to $ 9billion, driven by a volume decrease of 16% in Ocean and 14% in gateway terminals.

In Ocean, the lower volumes were partly offset by agile capacity deployment of the global network leading to lower costs, together with lower fuel prices and higher freight rates.

In Logistics and Services, profitability increased through cost measures, favorable airfreight contribution and the integration of Performance Team, while Terminals and Towage showed their resilience by compensating lower volumes through cost measures.

The cash return on invested capital (CROIC) for the last twelve months improved to 12.5% from 8.9% and ROIC increased to 4.7% from 1.4% in the previous year.

Maersk said it would continue to mind its spending announcing cost and structural measures across its businesses.

Furthermore, the company reinstated its full-year guidance for 2020, suspended in March due to COVID-19 uncertainties, saying that it expects EBITDA to be between $6 billion-$7 billion, before restructuring and integration costs. The projection is much more optimistic from the initial guidance of $ 5.5 billion.

However, the container shipping giant still expects the global demand growth for containers to contract in 2020 due to COVID-19 and Q3 2020 volumes to progressively recover with a current expectation of a mid-single digit contraction.

“The outlook and guidance for 2020 is subject to significant uncertainties related to the COVID-19 pandemic and does not take into consideration a material second lockdown phase. The guidance is also subject to uncertainties related to freight rates, bunker prices and other external factors,” Maersk noted.