CMA CGM reports financial results for Q2 2018
The Board of Directors of the French CMA CGM Group, a worldwide container shipping company, met under the chairmanship of Rodolphe Saadé, Chairman and CEO, to review the financial statements for the second quarter of 2018, the company said in its press release.
In the second quarter of 2018, the volumes transported by CMA CGM increased by +9.6%, higher than the industry growth. This progress can be explained by the strength of the Transpacific and Asia/Gulf lines within OCEAN Alliance, as well as lines from and to South America. Average revenue per container transported decreased slightly (-2.1%) in the second quarter of 2018 in comparison with the second quarter of 2017. The revenue of the Group in the second quarter of 2018 increased by +7.4% as compared to last year, attaining USD 5.70 billion.
Over the course of the second quarter of 2018, CMA CGM recorded a Core EBIT of USD 67.1 million, reflecting a core EBIT margin of 1.2%. The Core EBIT margin notably echoes the very sharp rise in unit bunker costs (+27.7% per ton of bunker over the past year).
The Group intends to pursue the cost reduction initiatives announced upon the release of its first quarter results to improve its operational and financial performance. These notably concern the optimisation of container fleet management and the improvement of energy efficiency.
The consolidated net income Group share amounts to USD 22.7 million in the second quarter. It is supported by improved financial results, positively impacted by the rise of the US dollar versus the Euro.
The acquisition of the Finnish business Containerships, a specialist in the intra-European market, is part of the strategy to strengthen CMA CGM’s offering in the intra-regional trades, one year after the acquisition of Mercosul in South America. Containerships offers its customers a complete range of services, with logistics solutions by ship, truck, rail and barges. Containerships will take delivery of four LNG-fuelled vessels with a 1,120 TEU capacity later this year. This transaction, subject to approval by the relevant authorities, should be closed before the end of the year.
The Group expanded its fleet in the second quarter with the delivery of the CMA CGM Jean Mermoz, a 20,600 TEU capacity container ship designed to operate on the Asia-Europe trades. It also took delivery of another Ice-Class vessel, whose reinforced hulls will enable it to operate on the Baltic routes.
During the second quarter, the Group continued to develop its services, in particular with the launch of Ocean Alliance Day 2 Product. With 41 East-West services (Asia-North America, Asia-North Europe and Asia-Mediterranean), the operational alliance of which CMA CGM is a part represents the largest offering on the market. Ocean Alliance is number one on the Transpacific trade, with 20 dedicated services.
On May 3, 2018, CMA CGM acquired a stake of approx. 25% in CEVA Logistics in the company's initial public offering. With this operation, the Group strengthens its presence in logistics. Commercial cooperation projects between the two groups will allow CMA CGM to offer its customers high added value solutions throughout the logistics chain. CMA CGM's securities were converted into CEVA Logistics common shares on August 13, 2018.
On 19 June, the Group announced the deployment of an innovative container tracking solution: TRAXENS by CMA CGM, a connected box that tracks, amongst others, the location, the opening and closing of container doors, and the temperature variations. This new offering is an important element in the Group's Customer Centricity strategy, enabling the collection and analysis of extensive data to improve customer service.
By enabling Shone (based in San Francisco) to collect data on board the Group's vessels, CMA CGM is participating in the development of an artificial intelligence system designed to facilitate the work of crews on container ships, whether in decision support, piloting assistance or maritime safety.
