CMA CGM’s adjusted EBITDA up 25% year-on-year in Q1 2020

CMA CGM

CMA CGM has released its financial results for the Q1 2020. During this reporting period, in the context of a slowdown in world trade and a decline in carried volumes, CMA CGM Group revenues amounted to $7.19bn, slightly down compared to the same period last year. The company said it managed to offset potentially higher losses thanks to the diverse range of industries of its customers, a balanced global presence, and the complementary nature of its shipping and logistics activities.

Net result Group share was positive at $48m (an increase by $91m compared to Q1 2019 and $170m compared to Q4 2019). These results, according to the company, were achieved on the back of an effective cost control and prompt adaptation of deployed capacity in response of evolving market conditions. The Group’s operating performance also improved significantly. Adjusted EBITDA for the Group increased by 25.0% to $973m, equating to a margin of 13.5%, up 3 percentage points when compared to Q1 2019.

Shipping revenues declined by 3.3% compared to Q1 2019 to $5.52bn. Volumes carried by CMA CGM decreased by 4.6% compared to the Q1 2019 due to the impact of COVID-19 and more specifically the shutdown of factories, particularly in Asia in February and March. Nevertheless, revenue per carried container improved slightly, due mainly to the application of fuel surcharges. Adjusted EBITDA (excluding gain from sales) increased sharply by 31.6% over Q1 2019 and reached $836m. Adjusted EBITDA margin increased by 4 percentage points to 15.1%. The performance reflects the full impact of the cost reduction plan implemented throughout 2019, and still continuing during the period.

CEVA Logistics’ revenues increased by 0.6% to $1.71bn, due primarily to the consolidation of CMA CGM’s logistics activities in May 2019. The impact of the health crisis was partly offset by an increase in air charters, which ensured supply chain continuity for the Group’s industrial clients as well as the supply of medical products. Adjusted EBITDA decreased by 4.9% to $137m, representing an adjusted EBITDA margin of 8.0%. A new phase in CEVA Logistics’ plan to return to profitability has been launched, and it includes revitalising business development, reducing costs, and modernising industrial assets and systems.

The world economy and global trade flows have been severely impacted by the COVID-19 outbreak, through factory closures in Asia, followed by lockdown measures, particularly in Europe and North America. During the first quarter, CMA CGM saw only a limited decline in volumes of 4.6%. The Group said it managed to promptly adapt its deployed capacity to the current environment while protecting the supply chains of its customers. Looking ahead, due to further lockdown measures taken especially in Q2 2020 in response to the spread of the virus, the Group expects volumes to decline by about 10% over H1 2020. Operating performance for the second quarter, however, should show significant improvement thanks to the Group’s cost control policy.

The Group said it continues to adjust its capacity and logistical resources to meet the needs of its customers to preserve its profitability and protect its cash flows and its liquidity. It added that it has set an objective to become carbon neutral by 2050 and that alternative fuels are expected to account for 10% of the Group’s fuel consumption by 2023.

Source: CMA CGM

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