Rising costs dent bottom line at CMA CGM
Net income fell by two-thirds to $103.1m. But core earnings before interest, tax, depreciation and amortisation margin recorded a significant increase compared with the second quarter of 2018, at 4%.
French carrier saw revenues and liftings increase, but higher fuel costs took their toll. Meanwhile, the company intends to make a full takeover bid for logistics operator CEVA
REVENUES at French container line CMA CGM rose by 6.3% year on year in the third quarter of 2018 to reach $6.1bn as the carrier increased volumes by 5.5%.
Net income, however, fell by two-thirds to $103.1m as rising fuel prices led to a sharp increase in unit costs.
“In a context of sharply rising fuel prices, CMA CGM core earnings before interest, tax, depreciation and amortisation margin recorded a significant increase compared with the second quarter of 2018, at 4%,” said chief executive Rodolphe Saadé.
But while the ebit margin should be expected to be higher during the busier third quarter of the year than the second, it was down from more than 10% on the corresponding period of 2017.
CMA CGM also confirmed that it had raised its equity share in CEVA Logistics to 33% and would be announcing a SFr30 per share bid, before the end of November, to CEVA shareholders who wished to dispose of their stakes in the Switzerland-listed logistics operator.
“By strengthening the partnership with CEVA, CMA CGM is actively engaging its logistics strategy,” Mr Saadé said. “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.”