CMA CGM Posts 67% Profit Growth as Bunker Costs Fall 36%

CMA CGM posted a $156 million profit during 2015's Q2, noting market overcapacity and low freight rates were cushioned by lower bunker prices

CMA CGM S.A. (CMA CGM) posted a $156 million net profit for 2015's second quarter, noting "strong and profitable growth" of 66.7 percent year on year.

CMA CGM says that its unit costs fell 10.9 percent year on year, thanks to falling oil prices, reporting operating expenses during Q2 at $3.7 billion compared to $3.9 billion during the same period last year.

"The decrease of operating expenses is mainly due to the decline in bunker prices, partly compensated by the effect of increased carried volumes," said CMA CGM in the report.

Of its operating expenses, $564.8 million was attributable to bunkers and consumables, compared with $891.3 million during the same period last year.

The average bunker rate for the period fell 36.4 percent from $590 per metric tonne (pmt) in the first half of 2014 to $375 pmt in the first half of 2015

"The decrease in average bunker rate mostly reflects the decrease in heavy bunker fuel prices although it also includes more expensive diesel oil purchases. Extended Emission Control Areas in place since January 1st, 2015 require indeed the use of low sulphur fuel or alternatively of diesel oil," the carrier noted.

During the second quarter CMA CGM carried 3.3 million TEU, a 6.2 percent year on year increase, compared to a reported global market volume growth between 1 percent and 2 percent.

The company's fleet is said to have grown by 8.6 percent year on year, with 37 boxships increasing the carrier's capacity by 12.2 percent, or 467 vessels from 430. 

In July, CMA CGM announced the delivery of CMA CGM Vasco de Gama, its latest 18,000 TEU capacity box ship from Chinese shipyard China State Shipbuilding Corporation (CSSC) and "one of the greenest goods transport means in the world."