Saturday , 21 October 2017
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CMA CGM suffers US$325m loss

French shipping company CMA CGM has suffered a US$325m net loss last year, which compares to a US$567m profit in 2015.

The loss made including the contribution of NOL, which the company acquired in June 2016, was equal to US$452m.

While the company’s revenue was up 1.9% year-on-year to US$16bn including NOL’s contribution, it was down 14.7% to US$13.4bn on a comparable basis.

Thanks to the acquisition of NOL, which operates under the APL brand, the group’s volumes rose by 20% year-on-year to 15.6m teu last year, despite being down 1.3% to 12.8m teu on a comparable basis.

According to a statement by CMA CGM, the fall resulted from the group’s “strategic choice to focus on volumes offering the best freight rates to preserve its operating profitability”.

In 2016, the average income per teu fell by 13.6% year-on-year amid “a difficult environment for the industry”, but increased by 2.9% between the third and fourth quarter.

This boosted the company’s revenue, which rose by 28.0% in the fourth quarter in 2016 compared to the same period in 2015.

In 2017, CMA CGM expects to benefit from the improvements experienced in the sector starting from the last quarter of 2016.

“In line with the 4th quarter of 2016, the first months of 2017 show an improvement in freight rates, and an increase in volumes,” a company statement noted.

“The group will maintain its discipline in its unit expenses control, pursuing the execution of the Agility plan.”

The company, which postponed to 2018 the delivery of three vessels originally planned this year, does not expect any new ship orders in the short term “in order to maintain the still delicate balance between supply and demand”.

CMA CGM’s CEO Rodolphe Saadé said: “2016 has been a landmark year in the history of our development, with the strategic acquisition of NOL and the creation of OCEAN ALLIANCE, which will fully contribute to the Group’s performance in 2017.

“In 2017, the market is expected to continue its recovery. CMA CGM will pursue its strategy of development and innovation, in order to consistently offer its customers more high value-added services and thereby differentiating ourselves from the competition.”