CMA CGM’s cost-cutting efforts have begun to pay off, with the French carrier reporting a $51 per teu decrease in transport costs in the second quarter, reports Lloyd’s Loading List.
Second-quarter revenue
Combined with a 6.3% increase in liftings during the quarter, the line was able to report an adjusted earnings before interest, taxation, depreciation and amortisation of $343.6m, up 60% on the corresponding quarter in 2018.
Second-quarter revenue was up 4.6% compared to the second quarter of 2018 to $6bn for the group’s shipping activities.
Volumes were boosted by its shortsea operations, which the company said demonstrated the value of its intra-regional brands. Liftings reached 5.5m teu, up 6.3% on last year.
First quarter scenario
In the first quarter, CMA CGM announced it was increasing its cost cutting measures by $300m to $1.5bn.
Cost savings came from initiatives to rationalise certain trades, efforts to, lower logistics costs and the reduction of vessel fuel consumption, CMA CGM said in a release.
In its maritime segment, the group reported a net profit of $2.3m.
Balancing maritime and logistics
CMA CGM has for the first time split out its results between maritime and logistics, to take into account its acquisition of CEVA, which it completed earlier this year.
But integration costs and development investment meant that the logistics side of the business ran at an operational loss.
This dragged down on the group’s net result, which fell to a loss of $109m, reversing a $23m profit in the second quarter of 2018. This figure, however, also included the impact of the new IFRS 16 accounting rules.
Intergration of CEVA – Strategic plan
CMA CGM said the integration of CEVA was “proceeding according to the strategic plan”.
The company added that, in a context of geopolitical uncertainty, it would continue to focus its efforts on operational efficiency, cost control and the rationalisation of its 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,” it said.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Lloyd’s Loading List
