CMA CGM Delivers Loss amid Rise in Bunker Prices
- Business & Finance
French shipping major CMA CGM witnessed a growth in volumes and revenue in a market environment affected by a sharp rise in oil prices.
In the first quarter of 2018, the volumes transported by CMA CGM increased by 15 percent, mainly driven by the service offering of the OCEAN ALLIANCE, the strong momentum of the African/US and North America/South America lines, as well the integration of Mercosul.
The group’s revenue in the first quarter of 2018 was up by 17.1 percent to USD 5.41 billion compared to the same quarter last year.
In the first quarter, the company recorded a net loss of USD 77 million, resulting from the unfavourable euro-dollar exchange rate variation.
“The shipping industry is experiencing sustained growth but was hit in the first quarter by the sharp increase in bunker prices,” Rodolphe Saadé, Chairman and CEO of the CMA CGM Group, said.
“In this environment, CMA CGM succeeded in recording a strong increase both in volumes transported and in revenue, while maintaining a positive core EBIT margin, thus demonstrating once again the relevance of our strategy. Volumes should remain high throughout the year,” Saadé explained.
CMA CGM informed that it is implementing an exceptional surcharge “in order to deal with the increase in bunker prices,” which continue to rise into the second quarter.
Following quarter end, CMA CGM acquired a stake of nearly 25 percent in CEVA Logistics. With this transaction, which is subject to regulatory approvals, CMA CGM expands its presence in the logistics sector.
“The market should see strong volume growth in 2018. The delivery of new vessels will significantly decrease in the second half of the year,” CMA CGM said, adding that it thus expects an improvement in the market environment in the second half of 2018, excluding bunker costs and the impact of exchange rates.
The company believes that its measures regarding the increase in freight rates, the implementation of Emergency Bunker Recovery Measures and cost reduction initiatives “should bear fruit in the second half of 2018.”