During Q2 2020, CMA CGM has announced to have improved profitability in all its business activities. Revenue for Q2 reached $7.0bn, down 9.0% Y-o-Y, due to a slowdown in volumes related to the impact of the pandemic on international trade. EBITDA improved, increasing 26.3% Y-o-Y, and reaching more than $1.2bn. The EBITDA margin posted gains, reaching 17.2% (vs. 12.4% during Q2 2019).
Shipping
Due to the COVID-19 pandemic, volumes carried during Q2 2020 were down 13.3% Y-o-Y, more limited than initially expected. As a result, revenue for Q2 was down 10.9% Y-o-Y, totalling $5.3bn for shipping, thanks to average revenue per TEU (twenty-foot equivalent unit) of $1,112, an increase of 2.8% Y-o-Y.
Shipping EBITDA grew by 30% during Q2 2020 at $1,052m (vs. $808m in Q2 2019). The operating margin was up by 86% to $497m, i.e., 9.3%.
Unit cost by TEU was down 4.6% Y-o-Y, at $892 due to the decline in oil prices, the Group’s cost-cutting initiatives and the reduction in the fleet of vessels and containers deployed.
Logistics
CEVA Logistics turnaround plan implementation remained on track despite the challenging environment, the company reports. According to CMA CGM, the pandemic has confirmed the relevance of its strategy of offering complementary shipping and logistics services, such as CEVA Logistics’ commercial airfreight and warehousing solutions. Q2 saw the initial signs of the recovery of the CMA CGM Group’s logistics subsidiary.
The Group’s logistics segment demonstrated resilience in Q2 according to the Group, despite revenue being down 4.7% at $1.7bn, also affected by adverse FX movements. EBITDA increased to $153m, a 4,1% increase Y-o-Y, despite the negative impact of the health crisis on its results estimated at $7m.
These results benefitted from the strong airfreight business thanks to air charters compensating the absence of regular capacity. Ground activities progressed further on their recovery. This performance offset the weakness of sea freight. The results of contract logistics were penalized during the quarter by the pandemic, which led to the closure of many sites. The operating margin is stated to grow by 78% to $40m.
After the Asia – India and Latam trade lanes transfer, the Group announced early July that CMA CGM will become the sole carrier on the Transpacific trade. This decision aims at simplifying the product offering while optimizing the cost base and adapting to the current economic and trade environment.
CMA CGM also stated that with this new development, the Group is aiming to simplify its brand strategy; it announced it became the sole global carrier supported by the following brands:
The recovery in container shipping seen since April is expected to continue during Q3 2020 for most routes, driven by faster recovery in the consumption of goods than of services, the growth of e-commerce, and usual seasonality.
Source: CMA CGM
