CMA CGM Volume Strong, Profit Dips
French carrier CMA CGM’s revenue and profit slipped last year despite a 6.3 percent volume increase, but the company said it’s counting on cost cuts and the pending acquisition of Singapore’s NOL to overcome a “tough” start to 2016.
CMA CGM's full-year sales were $15.7 billion, down 6.4 percent from 2014, as a 6.3 percent increase in transported volumes was outweighed by the steep fall in freight rates, it said in a statement.
Consolidated revenue was down 6.4% year-on-year to $15.7 billion. Volume growth helped stem this decline in revenue despite the sharp fall in freight rates.
Core EBIT came in at $911 million. The resulting core EBIT margin remained stable, at 5.8% for the year, and was once again one of the highest in the industry. Unit costs fell as a result of the slump in oil prices and the Group's tight rein on other costs.
Rodolphe Saadé, CMA CGM Group Vice-Chairman said: "Our operating performance once again illustrates the strength of our business model and our capacity to adapt. In a challenging market environment, we continued to roll out our strategy while adjusting our cost and financing structure to best effect. The beginning of 2016 was tough and marked by freight rates under pressure. We are therefore strengthening our continuous efforts to adapt and optimize our maritime services as well as our cost reduction program."
Growth in the container shipping market in 2016 will continue to be dependent on global macroeconomic trends. The beginning of 2016 is tough and marked by freight rates under pressures which will impact industry profability.
Against this backdrop, CMA CGM will pursue its ongoing efforts to adapt its operational organisation and optimise its lines.
In addition, CMA CGM has announced that its flagship fleet of six 18,000-TEU vessels will be deployed in the Transpacific, the industry's fastest-growing market, starting at the end of May. This decision, which will help to speed the Company's growth and optimize its vessel fleet, follows on from the successful trial calls made in December and February to several US ports and the inauguration of the CMA CGM Benjamin Franklin at Long Beach.
