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CEVA quarterly profit up 25pc to US$75 million as revenues rise 0.3pc

DUTCH logistics giant CEVA Holdings has posted a 25 per cent second quarter increase in operating profit to US$75 million, drawn on revenues of $1.97 billion, which increase 0.3 per cent year on year.

CEVA's second quarter profit increase shows the benefits of following the company's strategy implemented in January, the a statement accompanying the results.

"The company turned in a solid second quarter performance in the face of several industry headwinds and significant exchange rate fluctuations," the statement said.

Freight management delivered quarterly operating profit (EBITDA) improvement as the company's continued focus on productivity increases, process improvements and effective transportation procurement.

Volumes held steady in the face of uneven global demand. Quarterly air freight volumes were up 0.7 per cent year on year due to a weakening Asia Pacific export market. Ocean freight volumes were up four per cent reflecting solid growth in Europe.

Contract Logistics maintained industry-leading adjusted EBITDA margins of 5.5 per cent in the second quarter, up from 4.9 per cent in the first quarter driven by ongoing focus on underperforming contracts and effective warehouse space utilisation.

Contract Logistics revenue was up 0.9 per cent year on year in constant currency. CEVA generated $38 million of cash driven by improving earnings performance.

"The benefits resulting from CEVA's new operating model are accelerating," said CEO Xavier Urbain. "We foresee significant upside potential by continuing this focus on operational excellence and efficiency for both our customers and ourselves."

CEVA's new business pipeline showed continued strength in the second quarter, above prior year levels. The freight management new business pipeline was seven per cent above prior year; the contract logistics new business pipeline advanced 16 per cent year on year, said the company statement.

Technology and healthcare sectors showed particular strength and new business from small and medium-sized enterprises (SMEs) increased 21 per cent.

CEVA also announced the launch of a new global project logistics division, reporting to Helmut Kaspers, chief operating officer, air and ocean freight.

This new division enables CEVA to enhance and provide knowledge transfer of its highly successful Energy (oil, gas, renewal) sector services to other sectors, with a particular focus on industrials, aerospace and mining.

The company's current project logistics centres are located in Houston and Rotterdam, and will be expanding to Singapore, Shanghai and Dubai by year-end.