Bunker Price Decline Helps CMA CGM to "Strong" Financial Position Despite Q3 Earnings Fall and "Challenging Market"

Despite a 9% revenue decline for 2015's Q3, CMA CGM says it  "outperformed the market average."

CMA CGM S.A. (CMA CGM) Friday announced that while its third quarter revenues dropped 9 percent to $4 billion, the company is still in a "strong financial position" even though it is operating in a "challenging market."

"CMA CGM once again outperformed the market average in an industry shaped by a sharp fall in freight rates and overcapacity in certain markets," explained the company.

The decline in bunker prices, which Ship & Bunker data shows have halved for key grade IFO380 since this time last year, were said to have helped Q3 operating costs reduce 10.7 percent compared to the same period in 2014.

Overall for the first nine months of 2015, the shipping company says its consolidated revenues reached $12.1 billion, a "slight" decline of 3.3 percent year on year.

CMA CGM says its volumes were up to 3.3 million TEUs for Q3, and up to 9.7 million TEUs for the first nine months 2015, a reported 6.5 percent year on year increase.

"The container shipping sector is facing lower-than-expected volume growth, putting pressure on freight rates for many lines in the short term," explained CMA CGM in its outlook.

"Against this backdrop, the Group is continuing to make various capacity adjustments in order to maintain satisfactory load rates and optimise the use of its vessels."

The company suggests that it is looking at next year with optimism, commenting that while it expects freight rates to remain weak during 2015's Q4, "the market should rebalance during 2016."

Last week CMA CGM were named ahead of Maersk as the front runner in a possible acquisition of Singapore-based Neptune Orient Lines (NOL) although Drewry Shipping Consultants Limited (Drewry) said such a move would likely not be financially advantageous for either company.