French container shipping liner CMA CGM said it posted “excellent financial results” for the second quarter of 2017 as volumes surged and freight rates jumped, and affirmed its order for nine mega box vessels.
Volumes carried in the second quarter grew by 33.3% to 4.73 million twenty-foot equivalent units (TEUs) compared to the same period last year, attributed by CMA CGM to the integration of APL, the launch of OCEAN Alliance on April 1 this year, and industry dynamism.
The increase in freight rates on most of the group’s lines led to a significant 12.5% increase in average revenue per container in Q2 2017, pushing consolidated revenues to a strong expansion of 56.8% compared to Q2 2016, to reach US$5.55 billion.
Consolidated net income is $219 million for the quarter under review, a turnaround from the $129 million loss the previous year.
CMA CGM reported a core EBIT margin of 8.9% to $472 million, a reversal from a loss of $81 million in Q2 2016 and up 11.2 percentage points, as well as an increase of 3.4 percentage points in comparison to the previous quarter. A year after its acquisition, APL contributes $137 million to these results.
“CMA CGM is once again positioning itself as the best performing player in the global container shipping market in terms of core EBIT margin, as in Q1 2017,” said the company in a statement.
Rodolphe Saadé, CEO of CMA CGM group, stated: “The Group releases excellent financial results for the 2nd quarter, with a core EBIT margin sharply rising thanks to our strategy of profitable growth. Once again, CMA CGM outperforms the industry and demonstrates the excellence of its operational management as well as the relevance of its strategy.”
To keep pace with market growth, the Marseilles-based carrier said its board of directors has approved an order for nine container ships of 22,000 TEUs in capacity.
“This order, of which the first ships will come into service from the end of 2019, will further reduce unit transport costs, particularly on the Asia-Europe routes,” it added.
The company maintains a positive outlook for the next six months. “Given the recent trend in freight rates, and excluding a significant change in fuel prices and exchange rates, CMA CGM expects to continue to improve its operating results in the second semester compared to the first semester,” it said.
Photo courtesy of CMA CGM
