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CMA CGM net profit slips 2.9pc to US$567 million as sales fall 6.4pc
FRENCH shipping giant CMA CGM has posted a 2.9 per cent year-on-year decline in consolidated net profit to US$567 million in 2015, drawn on revenues of $15.7 billion, which fell 6.4 per cent.
The Marseilles shipping line, the world's third largest, carried 6.3 per cent more containers in 2015 to 13 million TEU in a fleet that grew 26 per cent to number 471 ships with a 14.8 per cent increase in carrying capacity to 1.89 million TEU.
The board also expressed satisfaction that operating profit (EBIT) was up 5.8 per cent - "once again one of the highest in the industry".
"Our operating performance once again illustrates the strength of our business model and our capacity to adapt," said CMA CGM vice-chairman Rodolphe Saade.
"In a challenging market environment, we continued to roll out our strategy while adjusting our cost and financing structure to best effect," he said.
Mr Saade recalled the beginning of 2016 as tough and marked by freight rates under pressure.
"We are therefore strengthening our continuous efforts to adapt and optimise our maritime services as well as our cost reduction programme," he said.
"At the same time, we entered a decisive new stage in our development with the project to acquire NOL [Singapore's Neptune Orient Lines, which owns APL container line]," Mr Saade said.
"The project is progressing in line with expectations. Combined with our intrinsic capacity to deliver solid operating results, this project will make us more competitive going forward," he said.
Volume growth was led by the new Ocean Three Alliance in place since January 2015 with China Shipping and UASC.
The CMA CGM board noted the company's "robust expansion in the United States, where the group had anticipated the market's growth".
Unit costs fell as a result of the slump in oil prices and the group's tight rein on other costs.
Among the operational highlights of the year was the launch of the Ocean Three Alliance on Transpacific and Asia-Europe routes.
"This agreement, effective since the beginning of 2015, enables the group to offer high-quality service while deploying the right size vessels," said the company.
The delivery of 18 ships was also noted, including six 18,000-TEU vessels deployed on major shipping routes, many of which are being deployed to the US west coast.
Also noted was enhanced intra-European coverage: since its consolidation within the CMA CGM group from July 1, OPDR [Oldenburg-Portugiesische Dampfschiffs-Rhederei] has seen volumes surge 30 per cent, attesting to the group's integration expertise and the growth of its recently acquired subsidiaries.
CMA CGM also extended its agency network, with new sales offices opened in 13 countries.
"These new offices will allow the group to deepen its footprint in countries with high growth potential and expand the client portfolio."
The company also pointed out it had stepped up expansion in the Logistics Division with the acquisition of 60 per cent of LCL Logistix, a third party logistics leader in India's fast-growing market.
It also opened new container depots in Africa, which rounded out CMA CGM's maritime shipping services with a high value-added multi-modal solution.
New terminal agreements were concessions won to develop terminals in Kingston, Jamaica and Kribi (with partners Bollore and CHEC) in Cameroon.
The Kingston terminal will provide the group with a major transshipment hub for its large-capacity vessels needing to navigate the new Panama Canal.
Looking ahead, CMA CGM said: "Growth in the container shipping market in 2016 will continue to be dependent on global macroeconomic trends. The beginning of 2016 is tough and marked by freight rates under pressures, which will impact industry profitability.
"Against this backdrop, CMA CGM will pursue its ongoing efforts to adapt its operational organisation and optimise its lines."
The group said it will continue with the implementation of its cost reduction programme combining rigorous operational practices, optimal fleet utilisation, reduction of energy consumption, and strict control of all its spending.
"Consequently, CMA CGM should continue to deliver above-market growth, leveraging its business model based on a global footprint, as well as its commercial dynamism and reactivity," the company statement said.
The Marseilles shipping line, the world's third largest, carried 6.3 per cent more containers in 2015 to 13 million TEU in a fleet that grew 26 per cent to number 471 ships with a 14.8 per cent increase in carrying capacity to 1.89 million TEU.
The board also expressed satisfaction that operating profit (EBIT) was up 5.8 per cent - "once again one of the highest in the industry".
"Our operating performance once again illustrates the strength of our business model and our capacity to adapt," said CMA CGM vice-chairman Rodolphe Saade.
"In a challenging market environment, we continued to roll out our strategy while adjusting our cost and financing structure to best effect," he said.
Mr Saade recalled the beginning of 2016 as tough and marked by freight rates under pressure.
"We are therefore strengthening our continuous efforts to adapt and optimise our maritime services as well as our cost reduction programme," he said.
"At the same time, we entered a decisive new stage in our development with the project to acquire NOL [Singapore's Neptune Orient Lines, which owns APL container line]," Mr Saade said.
"The project is progressing in line with expectations. Combined with our intrinsic capacity to deliver solid operating results, this project will make us more competitive going forward," he said.
Volume growth was led by the new Ocean Three Alliance in place since January 2015 with China Shipping and UASC.
The CMA CGM board noted the company's "robust expansion in the United States, where the group had anticipated the market's growth".
Unit costs fell as a result of the slump in oil prices and the group's tight rein on other costs.
Among the operational highlights of the year was the launch of the Ocean Three Alliance on Transpacific and Asia-Europe routes.
"This agreement, effective since the beginning of 2015, enables the group to offer high-quality service while deploying the right size vessels," said the company.
The delivery of 18 ships was also noted, including six 18,000-TEU vessels deployed on major shipping routes, many of which are being deployed to the US west coast.
Also noted was enhanced intra-European coverage: since its consolidation within the CMA CGM group from July 1, OPDR [Oldenburg-Portugiesische Dampfschiffs-Rhederei] has seen volumes surge 30 per cent, attesting to the group's integration expertise and the growth of its recently acquired subsidiaries.
CMA CGM also extended its agency network, with new sales offices opened in 13 countries.
"These new offices will allow the group to deepen its footprint in countries with high growth potential and expand the client portfolio."
The company also pointed out it had stepped up expansion in the Logistics Division with the acquisition of 60 per cent of LCL Logistix, a third party logistics leader in India's fast-growing market.
It also opened new container depots in Africa, which rounded out CMA CGM's maritime shipping services with a high value-added multi-modal solution.
New terminal agreements were concessions won to develop terminals in Kingston, Jamaica and Kribi (with partners Bollore and CHEC) in Cameroon.
The Kingston terminal will provide the group with a major transshipment hub for its large-capacity vessels needing to navigate the new Panama Canal.
Looking ahead, CMA CGM said: "Growth in the container shipping market in 2016 will continue to be dependent on global macroeconomic trends. The beginning of 2016 is tough and marked by freight rates under pressures, which will impact industry profitability.
"Against this backdrop, CMA CGM will pursue its ongoing efforts to adapt its operational organisation and optimise its lines."
The group said it will continue with the implementation of its cost reduction programme combining rigorous operational practices, optimal fleet utilisation, reduction of energy consumption, and strict control of all its spending.
"Consequently, CMA CGM should continue to deliver above-market growth, leveraging its business model based on a global footprint, as well as its commercial dynamism and reactivity," the company statement said.
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