CMA CGM has reported a US$268m loss in the third quarter of 2016, compared to a US$51m profit recorded in the same period last year.
Excluding Neptune Orient Lines (NOL), of which CMA CGM assumed control in June 2016, the company recorded a US$202m loss in the third quarter of the year.
Excluding the recently-acquired company, revenue fell by 16% year-on-year to US$3.3bn, while with the inclusion of NOL, revenue increased by 34% year-on-year to US$4.5bn.
A statement by the company read: “In a market environment shaped by continued pressure on freight rates, average revenue per teu, excluding NOL, was down 13.9% from third-quarter 2015 but up 3.8% on second-quarter 2016, bringing an end to a downward trend that had lasted for more than a year.”
The company reported a 36% increase to 4.5m teu in the volumes transported during the third quarter of 2016 thanks to the acquisition of NOL.
Excluding NOL, volumes were however down 2.7% year-on-year to 3.2m teu in the third quarter. The company attributed the fall to the group’s strategy of focusing on high contribution freight.
In the third quarter of 2016, CMA CGM’s fleet capacity went up by 14% year-on-year to 2.2m teu, while its vessel fleet decreased by 2.7% to 473.
The group commented: “CMA CGM’s operating performance, although unsatisfactory, was among the most resilient in the industry thanks to operating discipline, which notably involves keeping a tight rein on costs and being selective about the freight carried.”
The group’s unit costs went down by 9.7% year-on-year, excluding NOL, due to the combination of lower bunker prices and disciplined expense management.
According to CMA CGM, the process of integrating NOL into the group continued during the third quarter and delivered its first commercial and operating results, “with more than 20 new shipping alliances set up between the two companies and the deployment of a synergy and rationalisation programme”.
The full reorganisation of the two companies’ lines is set to be completed in April 2017 with the deployment of the Ocean Alliance, which also includes Cosco Container Lines, Evergreen Lines and Orient Overseas Container Lines (OOCL).
The group said that it will continue to focus on the integration of NOL and additional cost savings.
The statement added: “Shipping companies have continued to take measures to adjust the deployed capacity hence resulting in a better alignment between effective capacity (net of scrapped vessels) and volumes carried. Freight rates have improved slightly but remain nonetheless at a historic lows.”