AN IMPROVEMENT in profitability for the 2019 fourth quarter was driven by a development strategy and an ability to cut costs, CMA CGM chairman and chief executive Rodolphe Saadé says.
The French shipping behemoth and parent company of ANL has just released its results for both the 2019 fourth quarter and the full year.
Full year 2019 revenue was up 29% to US$30.3bn compared with 2018, driven by the acquisition of logistics company CEVA, which contributed US$7.1bn.
Excluding CEVA, however, revenue was down slightly by 0.8% mainly due to “the trend in geographic mix and the transfer of CMA CGM LOG’s business to CEVA Logistics”.
Group EBITDAA was US$3.8bn, giving a margin of 12.4%.
The Group incurred a net loss of US$229m, mainly due to the negative International Financial Reporting Standards impact of US$329m, and the US$140 million negative contribution from CEVA Logistics.
CMA CGM reported its shipping segment delivered “a robust performance in 2019” but Mr Saadé warned of the impact of coronavirus.
“These results were driven by our development strategy, particularly in short sea lines, and our ability to cut costs,” Mr Saadé said.
“The beginning of 2020 has been impacted by the Coronavirus epidemic. The Group has taken specific measures to protect its employees worldwide. This health crisis has also affected global trade and we have therefore adapted our shipping services.”
Mr Saadé said they were seeing “an upturn in business in China, with production ramping-up in factories and exports increasing”.
He said the fourth quarter revenue in the logistics business was affected by “weak growth” in the logistics market, caused mainly by a decrease in global air freight volumes and exchange rate effects.
The company is also taking up efforts to accelerate the energy transition in shipping and logistics.
Mr Saadé said to comply with low sulphur rules applicable since January 1, 2020, the group was focusing on using a low-sulphur fuel (0.5%) for its fleet.
The cost of this new regulation reportedly has been passed on in prices charged to customers and therefore has not been listed as affecting the group’s margin. The year 2020 is to see the delivery of the first 23,000-TEU container ship powered by Liquefied Natural Gas (LNG) under a nine-vessel order.