CMA CGM back in black, orders nine 22,000-TEUers to be world’s biggest

FRENCH shipping giant CMA CGM, the world's No 3 shipping line, has confirmed its orders for nine new 22,000-TEU ships destined to be the world's biggest when they enter service in 2019, Reuters reports.

Most ocean carriers have experienced great improvement in the sector this year with market leader Maersk Line saying that fundamentals were at their strongest since 2010.

Privately owned CMA CGM said the new ships would help it cut costs, particularly on Asia-Europe routes, and allow it to keep pace with market growth.

CMA CGM said a recent upward trend in freight rates had led it to expect higher second half operating profits compared with the first half, excluding significant variations in fuel costs and exchange rates.

CMA CGM posted a second quarter operating profit of US$472 million up from a year-on-year $81 million loss. This year's quarterly revenues came in at $5.55 billion, up 57 per cent year on year. 

The Marseille-based carrier also announced there had been a second quarter 33 per cent increase in container throughput and a 12 per cent rise in revenue per box.

Subsidiary APL, which was consolidated in June 2016 in CMA CGM's biggest ever acquisition, also remained profitable in the second quarter, with a $137 million contribution to group operating profit.

CMA CGM said its unit costs were stable in the second quarter year on year as they offset a near-60 per cent rise in fuel costs with measures under an ongoing savings plan and gains from the integration of APL.

CMA CGM was reported to have signed a letter of intent (LOI) with two Chinese yards on the construction of the new ships, which once completed, will become the world's biggest.

As stipulated in the LOI, CSSC Hudong-Zhonghua would be in charge of building five ships from the batch, while Shanghai Waigaoqiao Shipbuilding (SWS) would build four of them.

But the company did not provide further details on the ships and their future builders.

Said CMA CGM chief executive Rodolphe Saade: "Once again, CMA CGM outperforms the industry and demonstrates the excellence of its operational management as well as the relevance of its strategy."

Source: Schednet 

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