CMA CGM Delivers Strong Q2 2020 Results Despite COVID-19 Pandemic

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  • Ebitda grew by 30% to $1.05bn, with the operating margin up 86% to $497m in the shipping industry.
  • The group generated operating cash flow of more than $1.1bn, despite the COVID situation.
  • The group secured a €1.05bn guaranteed bank loan, with €300m of that allocated to Ceva.
  • 50% of all Ceva Logistics locations to operate on the CargoWise platform by 2022.

CMA CGM has published strong second-quarter results on the back of capacity and rate discipline, despite shipping volumes down 13.3% on the same period of last year, reports The Loadstar.

Shipping industry results

In shipping, ebitda grew by 30% to $1.05bn, with the operating margin up 86% to $497m.

Lower oil prices saw unit cost per teu down 4.6%, which was also boosted, said the line, by “the group’s cost-cutting initiatives and the reduction in fleet of vessels and containers deployed”.

Excellent results amidst the pandemic

The group overall saw positive net income of $136m, against a loss of $109m in the same period of last year, while operating performance generated operating cash flow of more than $1.1bn.

“Despite the Covid-19 pandemic, our group reported excellent results during the second quarter, thus strengthening our financial structure,” said Rodolphe Saadé, group chairman and chief executive.

“Thanks to our agile business model and synergies between our shipping and logistics business activities, we were able to adapt our service offerings to meet our customers’ fast-changing needs. We have also significantly reduced our costs and benefited from the drop in oil prices. Ceva Logistics’ turnaround plan is under way and in line with our expectations.”

Group’s liquidity position stands high at $2.6bn

“Volumes declined 13.3%, fairly well aligned with key competitors such as Maersk (-15.8%), Hapag-Lloyd (-11.1%), Yang Ming (-15.6%) and Zim (-12.2%). However, this still means a slight loss of market share, as global volumes declined 9.6% in Q2, as per CTS statistics.”

The group secured a €1.05bn guaranteed bank loan, with €300m of that allocated to Ceva. As a result, the group’s liquidity position stood at $2.6bn at the end of June. But, it said, it may look at new refinancing opportunities to strengthen its position.

Ceva saw revenues fall 4.7% to $1.73bn, but ebitda grew 4.1% to  $153m, resulting in a net loss of $1m, up $31m from a year earlier.

Further recovery expected in the third quarter

Ceva was saved by its air freight business, offsetting weakness in sea freight and contract logistics, which saw many sites close. 

The group expects further recovery to take place in the third quarter for most routes, “driven by faster recovery in the consumption of goods than of services, the growth of e-commerce, and usual seasonality. 

Future Plans

Meanwhile, Ceva Logistics today announced it had begun to roll out CargoWise, which will simplify and standardise all 4PL operational processes. The platform will be implemented over a five-year period and replace ‘multiple’ legacy systems.

By the end of 2022, 50% of all Ceva Logistics locations will operate on the CargoWise platform, with the whole project completed and deployed by 2025, it said.

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Source: The Loadstar

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