CMA CGM Expects "Strong improvement" After Q1 Loss

by Ship & Bunker News Team
Thursday June 7, 2012

French container line CMA CGM S.A. (CMA CGM) has made a loss of $248 million in the first quarter of 2012, the Marseille headquartered company has announced.

The loss comes despite year-on-year growth for carried volume in the period jumping 13.4% to 2.6 million twenty-foot equivalent units (TEUs), and consolidated revenue gaining 2.6% to $3.6 billion.

The firm also made "above initial target" savings for the quarter of $96.5 million, as part of its cost reduction plan.

The firm, one of the world's few 1 million plus TEU capacity box carriers, said its earnings before interest, taxes, depreciation and amortization was a loss of $31 million.

In a well-documented tough period for shippers, CMA CGM said the performance was due to high bunker prices, persistent overcapacity, and freight rates falling to new lows.

Looking ahead, the company was confident of reversing its fortunes with a "strong improvement expected in the second quarter" as "the market has significantly rebounded," citing increasing freight rates and big falls in bunker prices as factors helping its cause.

"As a result, CMA CGM Group's performance has improved sharply since the beginning of the second quarter," it said.

"In particular, the Group reached breakeven in terms of operating profit in April and will pursue its cost reduction plan, which will result in $400 million in savings by year-end.

"The Group also expects to return to the black in 2012."

Ship & Bunker News Team
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