CMA CGM Profit Up 43% in 2014 After "Extremely Robust" Performance

"CMA CGM's performance in 2014 was extremely robust," said Group VP Rodolphe Saade.

Container line CMA CGM Monday announced a 28.8 percent year-on-year rise in "core" Earnings Before Interest and Tax (EBIT), excluding disposals and impairment charges, to $973 million for the full year 2014.

"CMA CGM's performance in 2014 was extremely robust. By combining operational excellence, disciplined financial management and innovation, we have delivered strong growth in results with one of the industry's highest margins and an even healthier balance sheet," said Group VP Rodolphe Saade.

Revenue grew 5.3 percent in 2014 compared with the prior year, hitting $16.7 billion, while the group achieved net profit of $584 million, up 43.2 percent on 2013.

Carried volumes grew 8.1 percent year-on-year to 12.2 million twenty-foot equivalent units (TEU), which CMA CGM said largely outpaced its competitors, "reaching a new historic high thanks to gains on the leading East-West lines and the strong sales performance by the Group's regional and speciality brands."

The group also said it had continued with ongoing fleet adjustments during 2014, including the delivery of new vessels and the modification of "the shape of ten bow bulbs in its owned fleet, thereby further improving bunker fuel efficiency and reducing its carbon footprint."

The group sold off a 49 percent stake in terminal operator Terminal Link which it said helped boost profit for the year, but said it was expanding its logistics division with six new offices in the Middle East and Latin America.

CMA CGM said it had shore up its balance sheet during the year reducing its adjusted net debt 21.5 percent year-on-year to $2.9 billion, and bringing gearing down from 77 percent to 55 percent.

The group said it was driving even faster growth in 2015 through its membership of the recently launched Ocean Three alliance and new ships entering service during the year.

Ocean Three "enables the Group to offer quality service, deploy the right size ships and continue to optimise its unit costs," said CMA CGM.

In addition, the group said it hopes to benefit from low bunker prices.

"In 2015, subject to freight rate variations, the recent decline in bunker prices may have a positive impact on operating results for the year."

The group also said it would pursue its commitment to innovation in 2015, with the goal to "make its vessels more energy efficient" topping the list.

Earlier this month, consultants Alix Partners said that continuing investment in new, larger vessels is vital for the future of container lines, however, lower bunker prices are unlikely to boost financial positions sufficiently and financial improvements seen in recent years are not sustainable.