CMA CGM Margin Hit in Q2
French shipping liner CMA CGM said that rising oil price impacted its operating income in second quarter of 2018. "Volume growth and positive net income in a market environment affected by rising fuel costs," said a press statement from the company.
Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, commented on the results:"Over the second quarter CMA CGM has recorded a core EBIT margin close to the first quarter as well as a positive net income in spite of a sharp increase in fuel prices. The strong volume growth demonstrates our commercial strength and the quality of our service offering."
"The acquisition of a 25% stake in CEVA is an important step in our strategy to complement our transport offering with logistics services. We are confident for the second half of the year. We anticipate an improved operating margin thanks to the rise in freight rates and sustained volumes," Rodolphe added.
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.
During the second quarter, the Group continued its development along the lines of the strategy defined by Rodolphe Saadé, which resulted in several initiatives maritime development. 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.