Weak air, ocean freight activity mars Ceva’s Q1 performance

0
630

CevaFreight forwarder Ceva Logistics found its revenue sliding in the first quarter of the year as poor business conditions in air and ocean cargo forwarding undermined a strong performance in contract logistics.

The Netherlands-based company reported overall revenue of US$1.86 billion for the three months ended March 31, down 8.9 percent year-over-year, as its freight division labored in a poor market environment that saw the unit’s revenue dropping 11.5 percent compared to the same period last year.

“Ceva continues to show strength in contract logistics driven by initiatives the company put in place to increase profitability,” said CEO Xavier Urbain, who took over as the company’s chief executive in January. “We have not, however, been immune to market conditions that have impacted freight management.”

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased 7.5 percent to $43 million, driven by a strong performance in contract logistics, where profits increased 37.8 percent as the company decided to drop underperforming contracts last year, which also resulted in an expected and planned reduction in revenue in this segment.

“The strong performance in contract logistics was offset by weakness in freight management where lower volumes and margin pressure out of Asia adversely impacted performance,” said Urbain.

But, he added, the quarter has been the strongest yet in nearly two years in closing new business contracts, particularly in freight forwarding. “While revenue from these wins won’t be reflected until subsequent quarters, it shows positive momentum in the business.”