France’s CMA CGM group, the world’s third largest container line, logged a net profit of US$156 million in the second quarter, up 66.7% on second-quarter 2014, buoyed by a rise in volume and decreasing oil prices that offset the impact of sliding freight rates.
In its financial statement, CMA CGM said it registered “strong and profitable growth” in the second quarter to significantly outperform the market despite a sharp fall in freight rates and industry overcapacity.
The giant shipping liner said volumes it carried during the second quarter increased by 6.2% year-on-year to 3.3 million TEUs, higher than the global market growth of between 1% and 2%.
Average revenue per container carried decreased by 7.8%, but the slide, it said, was “significantly less than benchmark indices for the period due to the broad diversity of the group’s customers and lines.”
Unit costs fell 10.9%, largely due to the sharp fall in oil prices.
Core EBIT surged 59.3% compared to the second quarter of 2014 to $325 million, as the group’s lower unit costs outpaced the decline in average revenue per container carried. “The core EBIT margin of 7.9% was once again significantly above peer averages,” the company added.
During the first half of 2015, volumes carried were up 8.2% to 6.4 million TEUs, revenue was stable at $8.1 billion, and net profit almost tripled to $562 million.
During the second quarter, the group continued to upgrade its services in fast-growing markets and adapt its offering to the needs of its customers. It reported vigorous growth in its lines to and from the U.S., partly reflecting the weakness in the euro, which boosted European exports to the U.S., and in reefer cargoes.
Two new 9,400-TEU vessels joined the group’s fleet in the period—CMA CGM Tage and CMA CGM Thames. These vessels are designed to operate within the expanded Panama Canal and are currently positioned on fast-developing lines. During the period, the group also took delivery of CMA CGM Kerguelen and CMA CGM Georg Forster, the first two vessels in the 18,000-TEU series.
The company also won the 30-year concession to operate the Kingston (Jamaica) container terminal, which will become the group’s regional hub for the Panama Canal expansion scheduled for completion in 2016.
CMA CGM continued to develop its logistics subsidiary CMA CGM LOG, with the acquisition of a 60% stake in LCL Logistix, a logistics leader in India, and the signature of a framework agreement regarding a new logistics platform in Cuba.
Since July 1, CMA CGM has taken delivery of two 2,100-TEU vessels deployed on lines to Guyana, along with a 9,300-TEU and 18,000 TEU vessel. In the coming weeks, the group will take delivery of one 2,100-TEU vessel, one 9,300-TEU vessel, and two 18,000-TEU vessels, including CMA CGM Bougainville, set to become the largest container ship sailing under the French flag.
Looking ahead, the company anticipates freight rates in the third quarter to “remain particularly volatile for Asia-Europe and Asia-Mediterranean lines” and said it will continue to adjust its capacities to cope.
“CMA CGM expects to continue to outperform the market and deliver profitability above the industry average thanks to the core strengths of its business model,” it added.
Photo: Marc Ryckaert
