CMA CGM Recovers from Major Loss with USD 86 Mn Q1 Profit
- Business & Finance
French shipping giant CMA CGM reported a consolidated net income of USD 86 million in the first quarter of 2017, the company informed.
The results represent a significant rebound from a net loss of USD 100 million posted in the first quarter of 2016 pushed down by pressured freight rates.
During the quarter, volumes carried marked a strong increase of 34.2 percent in comparison to Q1 2016, thanks to the integration of APL. According to CMA CGM, for the first time and less than a year after its acquisition, APL has contributed positively to the group’s results.
Specifically, it achieved a gross operating income of USD 56 million, or a 4.4 percent core EBIT margin, which was ascribed to the combined benefit of higher revenue per unit and cost control. Its net result was a profit of USD 26 million.
“This result demonstrates the group’s operational efficiency and expertise, and positions CMA CGM in the first place for operational performance among the leading industry players,” the container carrier said.
The group’s consolidated revenues were up by 35.9 percent in comparison with Q1 2016, standing at USD 4.6 billion. As explained, the increase of average revenue per container carried led overall revenue to rise faster than volumes.
CMA CGM reported a core EBIT margin of 5.5 percent to USD 252 million, against 0.1 percent core EBIT margin from Q1 2016, as well as an increase of 1.3 points in comparison to Q4 2016.
“In the current shipping context, which is still affected by insufficient freight rates, CMA CGM has continued its positive trend begun end 2016, with further improvement in operating margins and net income,” Rodolphe Saadé, CEO of CMA CGM Group, said.
“Although the shipping industry still faces strong headwinds, we are confident our strategy should allow to improve operational results over the next quarter, leveraging the new OCEAN ALLIANCE and maintaining our focus in operational efficiency and innovation to the benefit of our customers. We continue to reinforce our position as a leading player in our industry.”
Moving ahead, the company said it was targeting a further improvement in its core EBIT margin, thanks to the continued improvement in freight rates.