CMA CGM states $50 m cut in Q1 losses but volumes up with 4.4%
CMA CGM saw revenue increase by 5.5% in the first quarter, compared with the same period of 2018, to $5.7bn. And this figure excludes the contribution from the CEVA Logistics acquisition.
Due to “strong development in intra-regional routes”, the carrier’s liftings rose 4.4%, to 5.16m teu, which is in contrast to its larger rival, Maersk Line, which reported a 2.2% decline in carryings in the same period, which it blamed on a dip in north-south volumes.
CMA CGM announcing ambitious cost reduction plan
Excluding the $21m loss attributed to CEVA, the carrier’s net loss for the quarter came in at $22m, which is an improvement on the $77m loss posted in Q1 last year. Rival Hapag-Lloyd, which significantly decided not to follow the trend of its peers and acquire logistics businesses, posted a Q1 profit of $109m.
CMA CGM said: “To adapt to the changing market, the group is now taking a new step in its transformation by consolidating its development and implementing and ambitious cost reduction programme.”
Both APL and CEVA Logistics play an important role in CMA CGM reorganisation
Specifically, it said, it was rationalising its deepsea liner brands by withdrawing APL from the Asia-Europe, transatlantic and Latin America tradelanes, instead servicing the routes with its global CMA CGM brand.
Meanwhile, CMA CGM said it was “resolutely committed to CEVA’s recovery” and had “already taken major structural decisions paving the way for CEVA’s rapid return to profitability”.
CEVA Logistics restructuration lead by Nicolas Sartini
This includes the appointment of company veteran Nicolas Sartini as CEO from 1 June, tasked with implementing CEVA’s turnaround plan. Furthermore a new CEVA operations centre has been established in Marseilles, near the group headquarters, to accommodate the forwarder’s management teams and support functions.
This will house CEVA’s restructured personnel of 200 employees, which includes relocated staff and some new recruits. There were no details provided on staff reductions resulting from the consolidation of CMA CGM’s liner services.
CMA CGM now ranked 4th as global ocean carrier.
The French carrier increased its fleet capacity by 6.6%, compared with the same quarter of a year ago, to 2.69m teu, consolidating its ranking as the fourth-largest ocean carrier, behind the 2.9m teu of the Cosco group.
However, CMA CGM has more ships on charter, 60% compared with 48% for Cosco, and some of these could be returned to owners as a consequence of the liner rationalisation and, not least due, to recent hikes in daily charter rates.
Moreover, the carrier has the largest orderbook by teu capacity, at 450,000 teu for 32 newbuilds, including nine 22,000 teu ULCVs, designed to be powered by LNG, and due to be delivered next year.
