CMA CGM profit up 26.3pc to US$1.2 billion as sales fall 9pc
FRENCH shipping giant CMA CGM's second quarter operating profit increased 26
FRENCH shipping giant CMA CGM's second quarter operating profit increased 26.3 per cent year on year to US$1.2 billion, drawn on revenues of US$7 billion, down nine per cent.
'Despite the Covid pandemic, our group reported excellent results during the second quarter, thus strengthening our financial structure,' said group chairman and CEO Rodolphe Saade.
'We have also significantly reduced our costs and benefited from the drop in oil prices. CEVA Logistics' turnaround plan is underway and in line with our expectations,' he said.
Container traffic volumes fell for the first time since 2009 as a result of lockdown measures in several countries, shutting down production units in China, followed by a sharp downturn in global consumer demand in March and April.
As lockdowns were lifted, volumes bounced back as of May under the combined effect of inventory rebuilding and the sharp recovery in the consumption of goods, notably in the United States.
CMA CGM was able to leverage its shipping and logistics expertise to tackle this challenge while also improving profitability, in particular by actively adapting fleet capacity to demand and continuing its cost discipline.
During the second quarter of 2020, Marseilles-based CMA CGM posted positive net income of $136 million, up sharply, compared with a loss of $109 million during the second quarter of 2019, and a benefit of $48 million during the first quarter of 2020.
Moreover, the group's liquidity was further strengthened by securing a EUR1.05 billion (US$1.2 billion) guaranteed bank loan, EUR300 million of which was allocated to the CEVA Logistics capital increase.
As a result, the group's liquidity position (available cash and undrawn credit lines) totalled $2.6 billion on June 30, allowing the group to meet financial obligations.