French container shipping and logistics group CMA CGM reported a net income of US$48 million in the first quarter of 2020, a reversal from the $43 million net loss in the same period in the same period last year.
The positive result for the January-March 2020 period includes a $185 million gain from the disposal of terminals, CMA CGM Group said in a statement.
Revenues for the first quarter this year was 3% down to $7.19 billion from $7.41 billion in the same period last year.
“This contained decrease is achieved thanks to the diverse range of industries in which the Group’s customers operate, a balanced global presence, and the complementary nature of the Group’s shipping and logistics activities,” the group said in a statement.
Shipping revenue likewise declined by 3.3% to $5.52 billion from $5.71 billion in the first quarter of 2019.
Volumes carried by CMA CGM decreased by 4.6% to 4.93 million twenty-foot equivalent units (TEU) in the first quarter of 2020 compared to the 5.17 million TEUs handled in the same period last year. CMA CGM said the drop was due to the impact of the coronavirus disease (COVID-19) pandemic and “more specifically the shutdown of factories, particularly in Asia in February and March.”
“Nevertheless, revenue per carried container improved slightly, due mainly to the application of fuel surcharges,” it added.
Subsidiary CEVA Logistics’ revenue increased by 0.6% to $1.71 billion from $1.70 billion, due primarily to the consolidation of CMA CGM’s logistics activities in May 2019.
The impact of the health crisis was partly offset by an increase in air charters, which ensured supply chain continuity for the group’s industrial clients as well as the supply of medical products.
“The good results of the first quarter demonstrate the strength and the resilience of the Group. During this unprecedented crisis, our customers have been able to rely on our agility, the expertise of our teams and the complementarity of our logistic and maritime offers, in order to ensure the continuity of their supply chains,” CMA CGM Group chairman and chief executive officer Rodolphe Saadé said.
Despite the uncertainty around global economy, Saadé said they anticipate an improvement during the second quarter, “thanks to our operational flexibility and our discipline in terms of cost control.”
The group expects volumes to decline by about 10% over the first half of the year but sees operating performance for the second quarter to show significant improvement “thanks to the industry’s discipline and the Group’s cost control policy.
“The current situation reinforces our conviction that it is essential to develop better balanced economic exchanges, whilst respecting the environment. We have set Carbon neutrality by 2050 as our objective and we are ready to face future challenges,” Saadé said.
At a United Nations conference held on June 2, 2020, Saadé announced the group’s target to be carbon neutral by 2050. Alternative fuels are expected to account for 10% of the group’s fuel consumption by 2023.