CEVA posts 'disappointing' US$90 million profit, box trade suffers

CEVA LOGISTICS has posted EBITDA of EUR70 million (US$90.6 million) in the third quarter ending September 30, blaming weak results on its container logistics segment, particularly, in southern Europe, the Middle East and Africa.

Third quarter revenue, on the other hand, was up 5.1 per cent to EUR1.84 billion on the back of strong growth in ocean freight and the automotive sectors.

In the third quarter, freight management revenues rose 6.4 per cent mainly due to strong growth in the ocean freight business, especially from Asia Pacific and the Americas where customers shifted volumes from air to ocean. Container logistics grew 3.3 per cent.

The group also reported "solid progress" in business development, after securing contracts valued worth EUR532 million during the quarter under review.

"Weak economic conditions continued to weigh on customer sentiment in the third quarter. With no real prospect of a significant and sustained market recovery in the short term, we continue to focus our efforts on cost control," said CEO Marvin Schlanger.

"Our business development activity has accelerated, resulting in our best quarter for contract wins since 2009. However, this was a disappointing quarter in terms of our profit performance. We are addressing the decline in profitability with a comprehensive plan to reduce overhead costs and improve contract performance. We are targeting a net benefit of EUR100 million from these actions."

In the first nine months, revenue for the group increased 4.1 per cent to EUR5.36 billion. Freight management revenues were up five per cent, while contract logistics grew 3.3 per cent. EBITDA declined 13.4 per cent to EUR206 million, mostly driven by weak performance in its container logistics business, a group release said.