CMA CGM Posts 67 Percent Quarterly Profit Growth

French container line CMA CGM Group recorded USD 156 million net profit for the quarter ended June 30, up 66.7% compared to USD 94m net profit in the second quarter of 2014, with greater volumes carried and a dip in unit costs helping offset a sharp fall in freight rates and industry overcapacity. 

Volumes carried during the second quarter increased by 6.2% year-on-year, to 3.3 million TEUs, compared to global market volume growth of between 1% and 2%. The company’s unit costs for the quarter fell 10.9%, largely due to the sharp fall in oil prices. However, average revenue per container carried decreased by 7.8%, leading to a 2.1% dip in quarterly revenue for the period, which stood at USD 4.11 billion.

CMA CGM’s fleet grew by 8.6% compared to 2Q2014, from 430 vessels to the current 467 vessels in service. The 37 newly introduced boxships increased the carrier’s carrying capacity by 12.2%, from 1.589 million TEU operated at the end of 2Q2014, to the current 1.783 TEU.

Core EBIT was up 59.3% compared to the second quarter of 2014 to USD 325 million, as the company’s lower unit costs outpaced the decline in average revenue per container carried.

During the first half of 2015, volumes carried were up 8.2% to 6.4 million TEUs, revenue was at USD 8.1 billion and net profit almost tripled to USD 562 million compared to 1H2014.

Looking ahead, CMA CGM expects freight rates to remain particularly volatile for Asia-Europe and Asia-Mediterranean lines in the third quarter of 2015. As a result, the company will continue to adjust its capacities.

In the coming weeks, CMA CGM expects to take delivery of one 2,100-TEU vessel, one 9,300-TEU vessel, and two 18,000-TEU vessels, including CMA CGM Bougainville, set to become the largest container ship sailing under the French flag.