Fuel Efficiency Boosts CMA CGM Results

CMA CGM improved the fuel efficiency of its ships

CMA CGM reported higher core profits for the second quarter of 2014, year-over-year, as it increased its fuel efficiency.

The France-based company reduced costs per twenty-foot equivalent unit (TEU) by 4.8 percent, driven largely by a 9.3 percent decline in fuel costs as both bunker prices and consumption per unit fell.

Its volumes carried rose by 8 percent year-over-year to 3.1 million TEU, while revenue grew 3.7 percent to $4.2 billion.

The volume growth came largely from the company's development of Asia-Europe and Africa lines, as well as the Asia-Pacific lines of subsidiary ANL.

CMA CGM's core earnings before interest and taxes (EBIT) rose 18.7 percent to $204 million, although its consolidated net profit of $94 million was down sharply from Q2 2013, when the company recorded a one-time gain on the sale of port terminal operations.

The carrier is now adding long-term charter vessels on its Black Sea lines and working toward expanding its port terminal operations in India and the Caribbean.

"Freight rates remained volatile overall, with the usual high level of volumes at this time of the year helping drive current rate increases," the company said.

"On this basis, CMA CGM expects its third-quarter operating performance to be sustained."

The planned P3 alliance among CMA CGM, Maersk Line, and Mediterranean Shipping Co. (MSC) collapsed in June, with Maersk Line and MSC choosing to form their own alliance.

In response, CMA CGM, the world's third-largest container shipping firm, has reportedly been seeking partners for its own alliance.