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CMA CGM profit up 54pc to US$158.9 million as revenues rise 25.8pc

FRENCH shipping giant CMA CGM's third quarter net profit increased 54

CMA CGM profit up 54pc to US$158.9 million as revenues rise 25.8pc

FRENCH shipping giant CMA CGM's third quarter net profit increased 54

26 November 2019 - 19:00

FRENCH shipping giant CMA CGM's third quarter net profit increased 54.1 per cent year on year to US$158.9 million, drawn on revenues of $7.62 billion, which rose 25.8 per cent.

Third quarter volumes increased 5.1 per cent year on year, primarily from the growth of the company's short sea business and a push to rebalance trades to help reduce operating expenses.



The company, the world's third biggest container shipping line, said its performance improvement plan resulted in a reduction in unit operating costs of $25 per TEU, compared with the second quarter of 2019 and of $89 per TEU, compared to the third quarter of 2018.



'CEVA Logistics' integration is also proceeding according to plan,' said the company press release.



'The new Marseille-based operations centre is enabling the group to leverage the disciplined management of its logistics operations and generate revenue synergies with the signing of several new contracts,' it said.



But CEVA's exposure to the automotive and technologies industries is continuing to dampen demand in both the freight and the contract logistics.



'In addition, the significant investments made to transform CEVA Logistics are also weighing on margins in the short term,' said the company statement.



The $860 million raised from vessel sale and leaseback transactions will primarily be used to pay down the loan contracted to acquire CEVA Logistics, with the balance currently standing at $200 million.



The $968 million from the sale of stakes held by CMA CGM in 10 port terminals to Terminal Link will finance these acquisitions. The transaction, still subject to antitrust and other regulatory approvals, is expected to close in spring 2020.



CMA CGM said it is reinforcing operational efficiency and cost discipline in its shipping business. In its logistics business, it confirms the profitability targets previously announced for CEVA, but re-sets objectives to 2023/2024 due to the challenging environment in certain industrial sectors.


WORLD SHIPPING

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