CMA CGM Q1 profit up 13.5pc to US$48m, but sales off 3.3pc to $5.52b
FRENCH container shipping giant CMA CGM increased year-on-year first quarter net profit 13.5 per cent to US$48 million drawn on revenues of $5.52 billion, down 3.3 per cent.
"The good results of the first quarter demonstrate the strength and the resilience of the group. Despite the uncertainty around global economy, we anticipate an improvement during the second quarter," said CMA CGM chairman and CEO Rodolphe Saade.
CMA CGM experienced a 4.6 per cent decline in year-on-year quarterly cargo volume, "demonstrating the resilience of the shipping industry," said the Marseille-based company.
Its recent take-over of once Dutch and now Swiss-based CEVA Logistics moved into a new phase of its return to profitability. The plan includes revitalising business development, reducing costs, and modernising industrial assets and systems.
CEVA Logistics' revenue increased 0.6 per cent to $1.71 billion, due primarily to the consolidation of CMA CGM's logistics activities in May 2019.
Disposal of a first portfolio of eight port terminals to Terminal Link for a cash amount of $815 million. The sale of two additional terminals covered by the agreement between CMA CGM and China Merchants Port (CMP) should be closed this summer.
Operating performance improved significantly. Adjusted EBITDA for the group increased 25 per cent to $973 million, equating to a margin of 13.5 per cent, up three percentage points year on year.
The impact of the Covid 19 crisis was partly offset by an increase in air charters, which ensured supply chain continuity for the group's industrial clients as well as the supply of medical products.
Operating performance is expected to increase in the second quarter lockdown measures taken even more in Q2 2020 in response to the spread of Covid-19. The company expects volumes to decline 10 per cent in the first half.
Alternative fuels are expected to account for 10 per cent of the group's fuel consumption by 2023. The year 2020 will mark a major step with delivery of the first 23,000-TEU containership powered by liquefied natural gas (LNG), allowing to reduce CO2 emissions by 20 per cent and eliminate nearly all sulphur and fine particle emissions.
Thanks to its operational efficiency, financial discipline, and business agility, the CMA CGM Group is ready to face uncertainties related to the current environment.
CMA CGM has 489 vessels carrying 22 million TEU. With CEVA Logistics, CMA CGM handles 500,000 tons of air freight and 1.9 million tons of inland freight every year.