French shipping liner CMA CGM said it registered volume and revenue growth as well as a positive net income in the second quarter of this year even as rising oil prices impacted its operating income.
Volumes transported by CMA CGM, one of the world’s biggest box shipping lines, in the April-June period increased by 9.6% compared to the same period in 2017, higher than the industry growth, the company said in a statement.
“This progress can be explained by the strength of the Transpacific and Asia/Gulf lines within OCEAN Alliance, as well as lines from and to South America,” it added.
Average revenue per container transported decreased slightly, down 2.1%, in the second quarter of 2018 compared to the second quarter of 2017.
Revenue, meanwhile, increased by 7.4% as compared to last year, attaining US$5.70 billion.
Core EBIT was $67.1 million, reflecting a core EBIT margin of 1.2%. This is down from 8.9% a year ago, and compared with 1.6% in the first quarter of this year.
“The Core EBIT margin notably echoes the very sharp rise in unit bunker costs (+27.7% per ton of bunker over the past year),” said the company.
Rodolphe Saadé, group chairman and chief executive officer, said: “Over the second quarter CMA CGM has recorded a core EBIT margin close to the first quarter as well as a positive net income in spite of a sharp increase in fuel prices. The strong volume growth demonstrates our commercial strength and the quality of our service offering.”
The group intends to pursue the cost reduction initiatives announced upon the release of its first-quarter results to improve its operational and financial performance, he added. These concern optimizing container fleet management and improving energy efficiency.
The consolidated net income group share amounted to $22.7 million in the second quarter. It is supported by improved financial results, positively impacted by the rise of the US dollar versus the euro.
CMA CGM said the group is confident about the second half of the year and anticipates an improvement in its core EBIT margin, due in particular to the recent rise in freight rates and sustained volumes.
“The acquisition of a 25% stake in CEVA is an important step in our strategy to complement our transport offering with logistics services,” said Saadé.
“We are confident for the second half of the year. We anticipate an improved operating margin thanks to the rise in freight rates and sustained volumes.”
