After a year shaped by global crisis, CMA CGM returns to profit
The Group expects to recover its record levels of results in 2010
The Board of Directors of France-based CMA CGM, the world’s third largest container shipping group, recently met under the chairmanship of M. Jacques R. Saadé to review the financial statements for the year ended 31 December 2009.
In a container shipping environment where every player was severely affected by the global crisis – the deepest the maritime shipping industry has ever experienced – the Group’s consolidated revenue declined by 30% to USD 10.5 billion (€ 7.6 billion) in 2009, dragged down by a sharp reduction in freight rates and volumes. Overall, 7.9 million TEU* were carried by the Group during the year, a 9% decline that nevertheless outperformed the 12% drop in world container traffic(1).
In response, the Group implemented a drastic cost reduction plan that delivered nearly USD 800 million in savings, without sacrificing its potential for future development.
2009 was a year of contrast, when the upturn in volumes on most of the trades beginning in July and the Group’s focus on freight rates restoration and cost reduction resulted in a return to positive EBITDA in the fourth quarter after eight months of deep losses.
As a result, EBITDA limited its decline to a loss of USD 667 million over the year and the net loss from maritime shipping operations stood at USD 889 million. The consolidated net loss for the period however came to USD 1.4 billion, however due to the USD 548 million in non-recurring expenses, which should give the Group a very healthy start for 2010.
Outlook for 2010
With its international presence through a worldwide network of agencies, especially in Asia and particularly in China, and its growing number of ports of call, CMA CGM is ideally positioned to take advantage of the recovery in global economy.
Markets that were hit first by recession, such as trades to United States or Asia-Europe and intra-Asia trades, have experienced sustained year-on-year growth in the first two months of 2010, with Asia-Europe volumes even rebounding by a spectacular 30% or so(2).
For CMA CGM, a total of 2.1 million TEU* were transported in the first quarter, up 22% and 4% compared with first quarter 2008. EBITDA is estimated at USD 380 million, up USD 640 million on first quarter 2009 and in line with first quarter 2008, while revenue was around USD 3.2 billion, up 30% year-on-year.
In 2010, CMA CGM will leverage a comprehensive range of measures to drive further growth:
Ø Major operational measures to streamline services, develop new partnerships, launch new lines in promising markets, etc., in a continuously reaffirmed commitment to being the preferred, benchmark partner for its international customers.
Ø Cost rationalisation, with the arrival of modern, efficient new vessels offering major economies of scale, the return of chartered vessels or renegotiation of expiring charters in a still favourable market and the reduction in ship cruising speeds.
Ø Enhanced customer services, by expanding the agency network, increasing the reefer fleet, deploying e-commerce solutions more widely, etc., to respond as effectively as possible to their emerging expectations.
2010 will also be shaped by the delivery of the Group’s new Head Office, the CMA CGM Tower, which in the autumn will consolidate nearly 2,000 Marseille staff members currently based at seven locations.
According to Rodolphe Saadé, Executive Officer of the CMA CGM Group: “The first 2010 quarter results, which largely exceeded expectations, demonstrate the Group’s ability to rebound. Since late 2009, CMA CGM has been restructuring its balance sheet and opening its capital to new investors. We have received several offers from industrial and financial investors and are committed to finalising negotiations before the end of summer”.
Philippe Soulié, Chief Executive Officer of the CMA CGM Group, declares: “In a market that has returned to growth in recent months, CMA CGM intends to strengthen its industry leadership by pursuing two priority objectives: to continue adapting its fleet and to complete the necessary strengthening of its financial structure. Today, Group Management team is working full time to meet these objectives and I am very confident in the Group’s ability to make them a reality, in close cooperation with its partners”.
*Twenty-foot Equivalent Units
Sources: Drewry (1), European Liner Affairs Association (2)
|
KEY FIGURES |
2008 |
2009 |
|
Freight volumes |
8,662,000 TEU |
7,882,000 TEU |
|
Share of worldwide shipping capacity |
7.6% |
7.5% |
|
Number of vessels |
395 |
352 |
|
Of which owned vessels |
98 |
85 |
|
Total Fleet capacity |
1,024,000 TEU |
1,040,000 TEU |
|
Total Container fleet |
1,757,000 TEU |
1,705,000 TEU |
|
Number of lines and services |
200 |
170 |
|
|
2008 |
2009 |
Q1 2010 estimated |
|
Revenue in USD |
USD 15.1 billion |
USD 10.5 billion |
USD 3.2 billion |
|
In € * |
€ 10.3 billion |
€ 7.6 billion |
|
|
EBITDA in USD |
USD 1261 million
€ 857 million |
USD (667) million
€ (480) million |
Around USD 380 million
|
|
In €* |
|
Net profit in USD |
USD 124 million |
USD (1,425) million** |
Around USD270 million |
|
In €* |
€ 84 million |
€ (1,025) million |
|
*After changing over to IFRS, the CMA CGM Group began reporting its results in US dollars in 2006. Figures are converted at the average annual €/USD exchange rate.
**Of which USD 548 million in non-recurring expenses
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