Doha: The outlook for the global shipping industry has changed to negative from stable in the wake of the coronavirus outbreak, Moody’s Investors Service said in a new report.
The change to a negative outlook primarily reflects the expected decline in 2020 EBITDA amid sharply reduced demand for container and dry bulk shipping services as the outbreak hits Chinese manufacturing output and demand for coal and iron ore, especially during the first half of 2020, as well as related economic disruption.
“The earnings of rated shipping companies will likely decline by around 6%-10% in 2020 compared with EBITDA growth of almost 40 percent in 2019,” said Maria Maslovsky, a Moody’s Vice President - Senior Analyst.
There is a downside risk that the EBITDA of shipping companies globally could decline by 25%-30%, similar to levels last seen in 2016 when Hanjin Shipping Co., Ltd. went bankrupt in one of the largest recent failures in the sector.
