CMA CGM’s Profits Plummet
CMA CGM’s second quarter profits have fallen by 85.8% compared with the same time last year, despite a growth in TEU volume, according to its second quarter financial figures.
The French ocean carrier blamed the continuing rise of bunker costs, which have soared by 27.7% per ton of bunker over the past 12 months, for the decline in its earnings before interest (EBIT).
The TEU volume handled by CMA CGM in the second quarter rose by 9.6% compared to Q2 2017, which contributed the company’s second quarter revenue increasing by 7.4%, even if its revenue per container dropped by 2.1%.
The results were also affected by CMA CGM’s acquisitions in the second quarter. It bought the Finnish business Containerships as part of its strategy to strengthen its intra-regional trade, as well as its presence in the liquefied natural gas (LNG) market.
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In May 2018, it also acquired a 25% stake in CEVA Logistics during the company’s initial public offering (IPO).
However, its pursuit of a merger with German container line Hapag-Lloyd didn’t materialise, and CMA CGM’s CEO Rudolphe Saade confirmed at an inaugaration ceremony on Friday, for the giant containership Antoine de Satin-Exupery, that the matter was now over.
In a statement, Saade commented on CMA CGM’s financial results: "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 acquisition of a 25% stake in CEVA is an important step in our strategy to complement our transport offering with logistics services. 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.”