French container shipping liner CMA CGM reported a volume growth of 5.5% in the third quarter compared to the same period in 2017, attributing the increase to the strength of most of the trades, particularly the trans-Pacific, India/Oceania, and Africa lines.
From July to September 2018, CMA CGM shipped 5.26 million containers, up from 4.98 million boxes ferried in the same time last year.
Revenue per container in the third quarter of 2018 increased slightly compared to the third quarter of 2017 (up 0.8%), as well as compared to the second quarter of 2018 (up 4.9%).
Consequently, revenue in the third quarter of 2018 rose by 6.3% to US$6.06 billion compared to the same period last year.
However, unit costs rose by 7.7% (up $77 per TEU), mainly due to the market price of fuel, resulting in an increase of $55 per TEU compared to the third quarter of 2017. This was only partially offset by the introduction of an emergency bunker surcharge.
As a result, third-quarter 2018 operating income amounted to $241 million, down 57.5% from Q3 2017 and representing a core EBIT margin of 4.0%, as compared to 10.4% in the same quarter a year ago, but higher than the 1.2% margin in the previous quarter.
This improvement from the second quarter confirms the performance improvement announced last September for the second half of the year, said the company in a release.
“This performance is the result of the Group’s ability to leverage its size and global network to maximize its revenues, despite the rise in fuel price,” it added.
The group’s share of consolidated net income amounted to $103.1 million in the third quarter, up from $22.7 million in the previous quarter but a sharp reduction of 68.1% from $323.3 million made in Q3 2017.
Upon the release of the third-quarter results, Rodolphe Saadé, chairman and chief executive officer of the CMA CGM group, stated: “In a context of sharply rising fuel prices, CMA CGM core EBIT margin recorded a significant increase compared to the second quarter of 2018, at 4.0%. In a market growing by 2.5% to 3%, the increase in volumes shipped by CMA CGM demonstrates our commercial drive and the quality of service offered to our customers.”
He said the company with continue to pursue the development of the CMA CGM group, including through the takeover of CEVA Logistics.
“By strengthening the partnership with CEVA, CMA CGM is actively engaging its logistics strategy. Our ambitious development project for CEVA was approved by its Board of Directors. Subject to approval from the regulatory authorities, this project will accelerate CEVA’s transformation, making it a more efficient logistics leader, to the benefit of its customers, employees and shareholders. Via a takeover bid, we hope to obtain the majority of CEVA’s share capital and unleash its full potential,” he said.
CMA CGM has increased its equity stake in CEVA by 33%, said the company. The Marseilles-based box liner signed a new cooperation agreement with CEVA on October 24 which provides for the lifting of the tag-along obligation and the launching of a takeover bid by the ocean carrier.
“At CHF 30 per CEVA Logistics share, this bid is aimed at shareholders wishing to sell their shares and not wait for the value creation resulting from the plan proposed by CMA CGM, which should be announced no later than 30 November 2018. The effective completion of the takeover bid is subject to regulatory approval,” said CMA CGM.
Photo source: CMA CGM
