CMA CGM Posts Loss in Q2
Ocean Carrier CMA CGM reported a net loss of $128 million for the second quarter of 2016, compared to a net gain of $156 million for the second quarter of 2015.
Its revenue declined to $3.5 billion ($3.3 billion excluding the contribution from Singapore’s Neptune Orient Lines (NOL), the parent company of container carrier APL) from the $4.1 billion in the second quarter of 2015 as the persistent pressure on freight rates drove down average revenue per TEU.
Rodolphe Saadé, CMA CGM Group Vice-Chairman said: "We are experiencing a market environment that remains difficult, with excessively low freight rates weighing on our revenue and margins. In an environment shaped by a lack of visibility, CMA CGM has the advantage of a strong liquidity position."
He added: "The strategic relevance of NOL, fully financed, is reinforced. We are working to improve operating performance, notably via the launch of the Agility plan, which includes a programme to reduce costs by $1 billion over the next 18 months, and in addition to the post-acquisition synergies with NOL."
Excluding the contribution from NOL, the parent company of container carrier APL, CMA CGM’s net loss stood at $109 million for the second quarter of this year.
Excluding NOL's contribution, freight carried by CMA CGM rose by 0.2% year-on-year in the second quarter, to 3.3 million TEUs.
Volumes rose slightly on the North-South lines, but declined on the East-West lines. Including NOL, which was consolidated as from 14 June, total volumes carried for the period amounted to 3.5 million TEUs.
Average revenue per TEU, excluding NOL, fell by 18.8% year-on-year and by 6.0% quarter-on-quarter, reflecting the persistent pressure on freight rates.
As a result, consolidated revenue contracted by 18.6% like-for-like over the period, to $3.3 billion ($3.5 billion including NOL).
The Group kept a tight rein on costs, helping to drive a 10.7% reduction in unit costs thanks to the combined impact of lower bunker prices and disciplined expense management. As part of this process, CMA CGM rationalised its network of lines and continued to align deployed capacity with market demand.
Core EBIT ended the period at a negative $66 million, excluding NOL, and a negative $81 million as reported.
Excluding NOL, the net loss stood at $109 million.
