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CMA CGM in the red for US$325m in 2016 although Q4 profits up $45m

FRENCH shipping giant CMA CGM suffered a US$325 million net loss for the whole of 2016 compared to a $567 million profit in 2015. Factoring in the contribution of Singapore-based NOL, the parent of APL, which the French shipping group acquired in June last year, 2016 losses ballooned to $452 million.

However, in the fourth quarter CMA CGM recorded a $45 million profit on the back of a 28 per cent year-on-year increase in revenue to $4.6 billion attributed to higher freight rates, IHS Media reported.

Container volumes in 2016 rose by 20.4 per cent to 15.6 million TEU, driven by the NOL acquisition, which consolidated CMA CGM's position as the world's third-largest shipping line after Maersk Line and Mediterranean Shipping Co.Excluding NOL, traffic dropped by 1.3 per cent to 12.8 million TEU

The shipping line posted a revenue growth of 1.9 per cent to $16 billion. However, excluding NOL's contribution revenue plummeted by 14.7 per cent to $13.4 billion.

"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," CEO Rodolphe Saade was quoted as saying.

"In 2016, we succeeded in maintaining a slightly positive core EBIT margin, despite historically low freight rates, focusing on the volumes generating the highest contributions."

The carrier's recurring core EBIT margin of 0.2 per cent for the whole of 2016 rose to 4.2 per cent (5.3 per cent excluding NOL) in the fourth quarter compared with 0.6 per cent in the final three months of 2015.

Mr Saade pointed out CMA CGM's Q4 profit, due to increasing freight rates, was one of the best performances in the industry. "In 2017, the market is expected to continue its recovery," he added.