France’s box liner CMA CGM said its consolidated net profit went up in the first quarter of the year to US$406 million, a sharp 419% hike from $97 million year-over-year.
Consolidated revenue was also up 1.8% to $4.013 billion, and core EBIT (earnings before interest and taxes) margin leapt to $406 million, representing 10.1% of revenue, which the company said is significantly above peers’ average.
Volumes rose 10.5% in the period to 3.1 million twenty-foot-equivalent units (TEUs), mainly from the increase in volumes on the East-West lines, particularly to and from the U.S., where volumes enjoyed sustained growth, and also from the launch of the Ocean Three Alliance.
“The group reaped the rewards of its operating efficiency and cost discipline as well as the sharp drop in bunker prices (bunker costs per TEU down 36.5%),” explained the company in a release.
The group continued to expand its reach, opening five new routes in the U.S. and extending its agency network up to 655 agencies in over 160 countries.
CMA CGM also managed to reduce its net debt by 10.3%, chiefly due to the favorable impact of the dollar-euro exchange rate and to the increase in the group’s cash available, leading to a promotion in credit rating by Moody’s to B1 with a stable outlook.
Fleet strengthening continues. On March 31, 2015, the firm took delivery of CMA CGM Kerguelen, its first 17,722-TEU vessel designed to be used on Asia-Europe lines. Another five similar-sized vessels will also be delivered this year, along with six vessels with a capacity of 9,400 TEUs and three vessels with a capacity of 2,100 TEUs.
Moreover, three 20,600-TEU vessels are set to be delivered in 2017.
On prospects for the year, CMA CGM has a positive outlook. “Spot freight rates for Asia-Europe lines have been rather volatile since the Chinese New Year; volumes remain sluggish however. Lines to and from the US continue to perform well. In view of the diverse nature of its lines and customer portfolio, the impact of these factors on CMA CGM in the immediate term should be limited.”
New Asia-Northern Europe slings
Meanwhile the shipping line is launching two new services between Asia and Northern Europe, which will both call at Rotterdam weekly.
Thus, its capacity between Northern Europe and Asia is to increase from 87 ships with a total capacity of 1 million TEUs to 106 ships with a capacity of 1.3 million TEUs. The number of calls per week will increase from 96 to 118.
In Northern Europe, the new FAL 10 service will call at Hamburg, Rotterdam, Antwerp and Felixstowe. In Asia, the service will make stops at Singapore, Nansha and Yantian in China, and Kaohsiung in Taiwan. In Europe, the FAL 13 will call at Hamburg, Rotterdam, Le Havre, and Algeciras in Spain. In Asia, stops will be made at Singapore, Yantian and Qingdao in China, and Kwangyang and Busan in South Korea.
Photo: Michael Tosta
