CMA CGM Reports 400% Profit Hike in First Quarter

A new emphasis on operational and cost efficiency, along with cheap bunkers, had a positive affect on the bottom line.

A combination of a new financial strategy and cheaper bunkers saw CMA CGM's profit in the first quarter of 2015 jump over 400 percent compared to 2014, the company announced this week. 

Net profit rose to $406 million from $97 million the year before, while revenues rose slightly to $4 billion from $3.9 billion.

The company said that operating efficiency and cost discipline, along with cheaper bunker prices were the main drivers of the quarter's performance. 

CMA CGM added that it has also been implementing its "balanced financial strategy" in a bid to strengthen "financial flexibility while pursuing controlled expansion to deliver further growth."

In particular, its East-West routes have enjoyed strong performance, especially to and from the U.S. where five new routes have been opened. 

"Spot freight rates for Asia-Europe lines have been rather volatile since the Chinese New Year; volumes remain sluggish," admitted the company.  

However "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."

In total, volumes carried saw a 10 percent increase to 3.1 million TEU from 2.8 million TEU. 

The launch of the Ocean Three Alliance, of which CMA CGM is a member of along with China Shipping Container Lines (CSCL) and United Arab Shipping Co. (UASC) was also credited with helping boost numbers. 

According to separate reports, CMA CGM has been much more effective in extracting profit and value from its vessel sharing agreements than companies such as Maersk Line, who also reported first quarter earnings recently. 

Last week, Maersk Line said that profit jumped 30 percent in the quarter, though experts have largely attributed the performance to a one time sale of the company's stake in Danske Bank.