CMA CGM profit declines despite sales rise
French shipping giant CMA CGM’s second quarter net profit fell ninefold to US$ 2.3 million year-on-year, yet enjoyed a 4.6 percent quarterly revenue increase to $6 million in the same period.
The company also posted a 6.3 percent year-on-year increase in container volume. The number of ships in the company fleet increased 3.7 percent to 528 while fleet capacity increased five percent to 2.76 million TEU.
The quarter was marked, said the company, by “solid operating performance, driven by improvements in cost control, resulting in a 60.1 percent increase in EBITDA (excluding CEVA Logistics).
Volumes transported by CMA CGM increased 6.3 per cent, driven mostly by growth in short sea and US trades.
“The group thus relied on the network of intra-regional subsidiaries such as CNC in Intra Asia, Mercosul in cabotage and door-to-door in Brazil, ANL in Australia and Oceania as well as Containerships in intra-European trades.
The deployment of the cost reduction plan allowed to reduce operational expenses by $51 per TEU in the second quarter compared to the first quarter.
“This mainly comes from initiatives to rationalize certain trades, the efforts to always improve operational efficiency, lower logistics costs and the reduction of the group’s ships consumption,” said the company statement.
Following the closing of CMA CGM’s tender for CEVA Logistics, a new corporate governance structure was put in place, with the election of Rodolphe Saade as chairman and Nicolas Sartini as CEO.
By consolidating the company’s management teams and support functions, the new operations centre in Marseilles, which opened on June 25, leadership and management of the group’s logistics activities were strenghthened.
In a context of geopolitical uncertainty, the CMA CGM continues to focus its efforts on operational efficiency, cost control and the rationalization of its industrial activities and brands.
“In addition, the positive momentum generated by the acquisition of CEVA Logistics will gradually enable the group to benefit from a less volatile and more diversified environment than the maritime sector,” the company said.
“Thanks to all the measures put in place, the group is confident for the second half of 2019, which should be better than the first one. The CMA CGM Group will continue to improve its financial performance and adapt its commercial offering in order to provide its customers end-to-end offers,” it said.