Maersk could hand back more cash to shareholders
Danish shipping group AP Moller-Maersk, which announced a maiden $1 billion (£609.87 million) share buyback last month, could be placed to hand back even more cash to investors, funded by asset sales and strong cash flows.
Speaking ahead of a day of investor and strategy meetings on Wednesday, analysts estimated the group could increase its distribution of cash to shareholders as much as ten times.
The global shipping and oil conglomerate announced its first share buyback programme in its 110-year history in August. It said it would buy $1 billion of its shares in the 12 months from 1 September and would consider more in the future.
Analysts, though, estimate the company has reaped some $10 billion through selling non-core assets over the last six years. Several also noted its stake in the Chissonga deep water oil project in Angola could be next on the block.
Broker Handelsbanken Capital Markets wrote: "It is our opinion that the company's strong balance sheet and cash flow, combined with fewer costs to oil exploration and oil production, mean Maersk can increase its share buyback programme by $5-$10 billion.”
Nordea Equity Research said exploration costs at Maersk Oil could be cut to $600 - $700 million in 2015 and 2016 from $1.1 billion last year, due to lower oil prices.
"We argue that A.P. Moller-Maersk can return significant cash to shareholders in the coming years, based on the strong earnings and cash flow profile, combined with the effects from recent divestments." Nordea analysts wrote in a note.
The bank includes in its estimate the sale of a 50 percent stake in the Chissonga project by next year. Maersk Oil has a 65 percent stake now.
Measured by turnover, A.P. Moller-Maersk is Denmark's biggest company. The group has about 1,000 subsidiaries although it focuses on container shipping through Maersk Line, terminal operations through APM Terminals, oil production through Maersk Oil and drilling through Maersk Drilling.
Nordea has a buy recommendation and price target of 19,000 Danish crowns. Maersk shares traded on Wednesday at 14,610 crowns, down 2.47 percent from the previous day’s close.
For the latest Maersk share price on Reuters, please visit: http://uk.reuters.com/business/quotes/overview?symbol=MAERSKb.CO
DHL Claim Multi-Sector Collaboration Key to Fighting COVID
Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.
This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go.
With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”.
Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats.
In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.
“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”.
How Do We Sustain Immunisation?
By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”.
Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared.
Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.