A.P. Moller-Maersk, parent of shipping line Maersk, said it has bought back almost $600 million of a total planned $1 billion worth of its own shares in the first phase of a purchase program.
Copenhagen, Denmark-based Maersk (OTC: AMKBY) in February announced it planned to buy back a total of $2 billion worth of shares in two phases over 12 months.
The first phase of the buyback program began Feb. 7 and will run to August of this year. The shares to be acquired will be limited to a total market value of around $1 billion.
The company said that through May 23, it had acquired 58,951 A shares and 333,853 B shares, including 2,090 shares from the Moller family, for a total of $599.7 million.
Maersk now owns 58,951 A shares and 440,918 B shares, or 3.16% of the company’s share capital.
Maersk earlier this month revised full-year global container volume growth from 4% to 4% growth to 1% contraction, on the effects of U.S. tariffs with trading partner countries, including China.
Buybacks increase earnings per share because there are fewer shares and also increase earnings as a percentage of assets and earnings as a percentage of equity, ratios that Wall Street tracks. It’s also tax-efficient for U.S.-based investors because increased share value monetized as capital gains is taxed at lower rates than distributing the excess cash to investors as dividends.
According to public information, Maersk stock is 0.02% owned by institutional investors, 0.01% by company insiders, and 99.97% by public companies and individual investors.
Maersk Mc-Kinney Moller, a fourth-generation descendant of the Maersk family which controls the shipping giant, is chair of both the A.P. Moller Foundation and its investment company, A.P. Moller Holding, where her son, Robert Maersk Uggla, is the chief executive.
Find more articles by Stuart Chirls here.
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