CMA CGM Continues Growth in More Balanced Market
The third quarter of 2018, saw volumes shipped by CMA CGM record a growth of 5.5% compared to the 3rd quarter of 2017.
Over the period, CMA CGM exceeded 5 million containers shipped. This increase is attributable to the strength of most of the trades, particularly the Transpacific, India/Oceania and Africa lines.
Revenue per container in the third quarter of 2018 increased slightly compared to the third quarter of 2017 (0.8%), as well as compared to the second quarter of 2018 (+4.9%).
Consequently, revenue in the third quarter of 2018 rose by 6.3% to $6.06 billion.
Unit costs rose by +7.7% ($77 per TEU), mainly due to the market price of fuel, resulting in an increase of $55 per TEU compared to the third quarter of 2017.
This was only partially offset by the introduction of an Emergency Bunker Surcharge.
CMA CGM posted third-quarter 2018 operating income of $241 million, representing a core EBIT margin of 4.0%, as compared to 1.2% in the previous quarter.
This confirms the performance improvement announced last September for the second half of the year.
This performance is the result of the Group's ability to leverage its size and global network to maximize its revenues, despite the rise in fuel price.
The Group’s share of consolidated net income amounts to $103.1 million in the third quarter, up from $22.7 million in the previous quarter.
Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group stated: "In a context of sharply rising fuel prices, CMA CGM core EBIT margin recorded a significant increase compared to the second quarter of 2018, at 4.0%.
“In a market growing by 2.5% to 3%, the increase in volumes shipped by CMA CGM demonstrates our commercial drive and the quality of service offered to our customers.”
As CEVA's major shareholder since the company's IPO in May 2018, CMA CGM signed a new cooperation agreement with CEVA on 24 October to strengthen their development project.
All CEVA shareholders will benefit from the substantial value creation expected from this project, as CEVA’s shares should remain listed.
This agreement will permit CEVA to accelerate its transformation via a strengthened development project.
This agreement also provides for the lifting of the tag-along obligation and the launching of a takeover bid by CMA CGM.
At CHF 30 per CEVA Logistics share, this bid is aimed at shareholders wishing to sell their shares and not wait for the value creation resulting from the plan proposed by CMA CGM, which should be announced no later than 30 November 2018.
The effective completion of the takeover bid is subject to regulatory approval.
Rodolphe Saadé added: “By strengthening the partnership with CEVA, CMA CGM is actively engaging its logistics strategy.
“Our ambitious development project for CEVA was approved by its Board of Directors. Subject to approval from the regulatory authorities, this project will accelerate CEVA’s transformation, making it a more efficient logistics leader, to the benefit of its customers, employees and shareholders.
“Via a takeover bid, we hope to obtain the majority of CEVA's share capital and unleash its full potential.”
Read More: CMA CGM Given Green Light in Takeover Plan