CMA CGM Reports Encouraging Outlook for 2012
CMA CGM, the world’s third largest container shipping group, reported revenue of U.S. $14.87 billion for the year ending December 31, 2011, a 4% increase on 2010. Volumes carried increased by 11%, outperforming the market’s 6.5% increase and reaching a record high of 10,016,000 teus.
The market environment was challenging, shaped by overcapacity and the steep run-up in oil prices, with per-tonne bunker prices soaring 34% over the year. CMA CGM nevertheless enjoyed a satisfactory operating performance, thanks to its extremely efficient fleet, global network and sustained cost discipline.
EBITDA stood at U.S. $711 million, down from 2010, a year in which the entire container shipping industry reported record profits.
The Group ended the year with a consolidated net loss of U.S. $30 million.
CMA CGM continued to assertively dispose of non-strategic assets during the year. It also strengthened its balance sheet by issuing U.S. $500 million in ORA equity notes to the Yildirim Group and raising an aggregate U.S. $945 million through two bond issues denominated in dollars and euros.
Although the beginning of the year was difficult for the entire industry, freight rates are now trending upwards, especially outbound Asia. Several shippers, including CMA CGM, have announced and are introducing significant rate increases as from the 1st of March 2012.
In addition, to enhance its operating performance, the Group plans to continue implementing operating partnerships with MSC on the Asia/North Europe and South America lines and with Maersk on the Asia/Mediterranean, Adriatic and Black Sea trades; deploy increasingly efficient, modern and cost-effective vessels on every trade; develop more innovative, high-quality information technology services thanks to the new strategic partnership with IBM.
CMA CGM is pursuing its cost reduction plan, which is expected to deliver U.S. $400 million in savings this year. In the same way, the decline in charter rates will reduce operating costs by US$80 million in 2012.
The Group expects to report a profit in 2012, in a market which is difficult to predict, given the scheduled arrival of a large number of new vessels and further increases in bunker costs.
The Group remains confident in the future of the industry and will continue to strengthen its positions, particularly in Russia, India, Latin America and Africa, as well as in the reefer segment.