FRENCH shipping giant CMA CGM has posted a third-quarter loss of $268 million, reversing a profit of $51 million a year earlier due mainly to lower volume and rates, IHS Media reported.
Excluding expenses related to the company's September acquisition of Neptune Orient Lines (NOL), parent of APL, the container line's loss was $202 million, the third quarterly loss in a row.
CMA CGM called the performance "unsatisfactory" but said the company was "resilient" and had managed to maintain "operating discipline" by "keeping a tight rein on costs" and being selective about the freight carried.
The carrier also said it had fully repaid ahead of schedule a loan taken out to acquire NOL, with payments totaling $880 million from the proceeds of two sale and lease-back transactions involving 11 vessels that were completed on last Wednesday. The payment, along with two others made earlier, means the full loan of $1.7 billion taken out to acquire NOL has been repaid, the company said.
The results of CMA CGM are the latest reflecting the industry's battle with extreme overcapacity and weak demand. Maersk reported a third-quarter loss of $116 million, and container lines reporting recent losses include NYK Line, Evergreen Marine, Yang Ming Line and Hanjin. Hapag-Lloyd posted a net profit but an operating loss for the third quarter.
CMA CGM's revenue fell 16.3 per cent from $3.98 billion in the third quarter of 2015 to $3.33 billion without the NOL revenue, but rose 33.9 per cent to $4.47 billion when including NOL revenue.
The declines came as the volume of TEU carried by the company fell by 2.7 per cent, to 3.2 million in the third quarter. "The slight contraction is attributable to the group's strategy of focusing on high contribution freight," CMA CGM said.
The carrier's 2016 third-quarter volume was 4.5 million TEU, including the NOL volume, for an increase of 35.8 per cent above the 2015 quarter.
Pressured by the glut in container ship capacity and punishingly low rates, the carrier's average revenue per TEU was down 13.9 per cent from the third quarter of 2015, excluding the NOL contribution, the company said.
Still, that was a 3.8 per cent increase from average revenue per TEU in the second quarter, the company said. The increase brought "to an end a downward trend that had lasted for more than a year," the company said.
"Shipping companies have continued to take measures to adjust the deployed capacity hence resulting in a better alignment between effective capacity (net of scrapped vessels) and volumes carried," the company said in a statement. It also pointed that freight rates have improved slightly but remain nonetheless at historic lows.
Looking ahead, the carrier said "it will continue to focus on the integration of APL, additional cost savings and the quality of service provided to its customers."
Source: SchednetPrevious Next
2018 is Likely To Be The Best Growth Year Since 2011:Mr Vishavdeep Gautam, C O O , WOMAR Logistics
India Tanker Shipping Trade Summit 2018