FRENCH container liner CMA CGM reported growth in volumes in the second quarter of 2018, but also reported issues with increasing bunker prices.
In CMA CGM’s recently released report on its second quarter financial results, the company noted its core EBIT (earnings before interest and taxes) margin was 1.2%, and fell from US$472m in Q2 2017 to US$67m in the same period this year.
The company’s report said its core EBIT reflected the “very sharp” rise in bunker costs, which it said increased 27.7% per tonne of bunker over the past year.
“The Group intends to pursue the cost reduction initiatives announced upon the release of its first quarter results to improve its operational and financial performance,” the report said.
“These notably concern the optimisation of container fleet management and the improvement of energy efficiency.”
However, the company reported a 9.6% increase in volumes carried in Q2 2018 over the same period last year, to 5.19m TEU.
Its fleet also increased over the period (10.2%) to 509, and its fleet capacity likewise increased (11.5%) to 2.6m TEU.
CMA CGM chairman and chief executive Rodolphe Saadé said over the second quarter, CMA CGM has recorded a core EBIT margin close to the first quarter, as well as a positive net income in spite of a sharp increase in fuel prices.
“The strong volume growth demonstrates our commercial strength and the quality of our service offering,” he said.
“The acquisition of a 25% stake in CEVA is an important step in our strategy to complement our transport offering with logistics services. We are confident for the second half of the year. We anticipate an improved operating margin thanks to the rise in freight rates and sustained volumes.”