“CEVA went through significant and structural changes in the first half of 2019 against a challenging macroeconomic backdrop. We are currently focusing on the turnaround of the Company through deep operational changes and on achieving positive free cash flow as early as the fourth quarter 2019,” said Nicolas Sartini, Chief Executive Officer of CEVA Logistics.
For H1 2019, revenue increased by 2.5% in constant currency to $3,514m. On a reported basis, revenue in the first half declined by 3.4% year-on-year.The group’s EBITDA was $281m, which before accounting adjustments represented $85m resulting in an EBITDA margin of 2.4%, H1 2018 EBITDA margin was 3.3%.
EBITDA in the first half of 2019 included approximately $12m restructuring charges, an item previously recorded in Specific Items until Q1 2019. EBITDA was negatively impacted by the performance of Contract Logistics in Italy, although an agreement has been reached with one of the two customers involved in the issues. Full resolution of the issues in Italy are reportedly underway. EBITDA was also affected by softer business in some automotive contracts. In Freight Management, stronger yields (net revenue per tonne) were achieved by CEVA in Air Freight despite a significant contraction of the market volumes whilst Ocean Freight volumes were impacted by a major contract loss in the second quarter. Finally, as explained above for revenues, the translation effect of some currencies into USD negatively impacted EBITDA by a further $7m in the first half of 2019.
Before accounting adjustments, the group’s adjusted EBITDA for H1 2019 amounted to $104m, down from $143m, in the same period of 2018. This number includes the EBITDA for Anji-CEVA of $19m, down $5m compared to the same period of 2018, due to the contraction of the domestic automotive market in China.
As of June 30, 2019, net debt was $1,434m compared to $1,192m on December 31, 2018. The increase of $242m is largely explained for by the acquisition of CMA CGM LOG, financed by a vendor’s loan of $114m.
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