MARSEILLE: The Board of Directors of the French group CMA CGM, one of the world leaders in maritime container transport, met under the Chairmanship of Mr. Jacques R. Saadé, Chairman of the Board of Directors of CMA CGM, to review the accounts for the first quarter of 2017.
Mr. Rodolphe Saadé, CEO of CMA CGM Group commented : “In the current shipping context, which is still affected by insufficient freight rates, CMA CGM has continued its positive trend begun end 2016, with further improvement in operating margins and net income.
Our strong performance, which once again distinguishes the Group, is due to the confidence our clients continue to show in us as a reliable and dependable business partner, as well as to the rigorous operational management of our activities. For the first time and less than a year after its acquisition, APL has contributed positively to our Group’s results.
Although the shipping industry still faces strong headwinds, we are confident our strategy should allow to improve operational results over the next quarter, leveraging the new OCEAN ALLIANCE and maintaining our focus in operational efficiency and innovation to the benefit of our customers. We continue to reinforce our position as a leading player in our industry.”
Q1 Activity and Financial Results
Strong increase in Shipping volumes and revenue
During Q1 2017, volumes carried marked a strong increase of 34.2% in comparison to Q1 2016, thanks to the integration of APL.
In addition, CMA CGM focused on profitability. The increase of average revenue per container carried led overall revenue to rise faster than volumes.
The Group’s consolidated revenues hence registered a strong increase of 35.9% in comparison with Q1 2016, to 4.6 billion USD.
Strong increase in Financial Performance
Despite the strong increase in fuel price, combined costs continued to drop, thanks to the dual effect of the operational improvement plan Agility and synergies following the integration of APL.
CMA CGM reported a core EBIT margin of 5.5% to 252 million USD, a significant increase in comparison to Q1 2016, as well as an increase of 1.3 points in comparison to Q4 2016.
This result demonstrates the Group’s operational efficiency and expertise, and positions CMA CGM in the first place for operational performance among the leading industry players.
For Q1 2017, the Group has registered a consolidated net income Group share of 86 million USD.
Significant Improvement in APL’s operations: first quarterly profit since 2011
For the first time since 2011, the APL shipping operations registered satisfactory quarterly results with a return to profitability: it achieved a gross operating income of 56 million USD, or a 4.4% core EBIT margin, thanks to the combined benefit of higher revenue per unit and cost control. Its net result was also a profit of 26 million USD.
Highlights since 1st Jan 2017
On 7 February 2017, Jacques Saadé, founder of the CMA CGM Group, appointed Rodolphe Saadé as Chief Executive Officer.
On 14 February, CMA CGM and Alibaba One Touch agreed on the implementation of a new digital cooperation policy, providing access to CMA CGM’s service offerings via the Alibaba platform. The Group’s strategy consists indeed in leveraging digitalization to foster growth and improve performance, Furthermore, CMA CGM recently launched a new version of its mobile app for its customers. This app allows them to track their cargo from the port of departure all the way to the arrival port, view shipping schedules and even keep up to date on the CMA CGM Group’s news.
On 1 April, the deployment of largest operational shipping alliance, OCEAN ALLIANCE started; CMA CGM is the leading player of that alliance.
CMA CGM and its subsidiaries, including APL, customers have been very appreciative of the Group unique transport solution combining the 40 shipping lines encompassed by this alliance with logistic and intermodal solutions.
On 25 April, Rodolphe Saadé signed a joint-venture agreement with the ADANI Group to operate the new container terminal (CT4) at Mundra, India’s biggest container port, situated north of Mumbai. CT4 will be the only port terminal on India’s West Coast accommodating the world’s largest containerships.
Excluding the potential variations in fuel price and exchange rates, CMA CGM targets a further improvement in the Group’s core EBIT margin, thanks to the continued improvement in freight rates supported volumes and the confidence of its customers who recognize CMA CGM as a reliable and dependable partner.