Sunday, February 27, 2011

Another Container Shipper Reports Record Profits

French Group Position Now Much Stronger
Shipping News Feature

FRANCE – WORLDWIDE – It is a year since our article on CMA CGM pointed out the perils facing the container shipping giant as it negotiated a course through the mine strewn waters of debt in which it found itself. Twelve months in ocean freight however can make a vast difference and the French carrier was able to report a much rosier picture this week with its 2010 figures.

The Group reported revenue of $14.3 billion for the year, a 36% increase on 2009 that was led by the combined impact of higher volumes carried and improved freight rates. In all, more than nine million TEU’s were carried during the year, up 15% on 2009. With capacity increased by 17.7% and representing 8.6% of worldwide capacity at year-end, CMA CGM believes it has consolidated its position as a global box carrier. EBITDA stood at US$2.5 billion for the year, yielding an EBITDA margin of 17.6%, one of the industry’s highest. Consolidated net profit ended the year at US$1.6 billion.

The group reported Asia – US routes back to what they were before the slump in trade which affected all markets whilst internal Asian routes and those into Europe were at record highs. After reporting record results in 2010, CMA CGM expects to return to normalised profitability levels in 2011. Rodolphe Saadé, Executive Officer of CMA CGM Group, said:

“The excellent results reported by the Group were driven by the strategy introduced in 2009 and pursued in 2010. They effectively demonstrate the strength of our business model, as the Group successfully capitalised on the upturn in world trade during the year. The Group will continue to expand during 2011. The issue of $500 million in redeemable bonds to the Yildirim Group, being now finalised, CMA CGM enjoys a stronger financial position that it intends to consolidate, in particular by diversifying its sources of financing.”

From the dark days of a year ago in 2010, the French group enhanced its fleet capabilities by taking delivery of 20 new containerships, of which 12 are owned (including eight with over 11,000-TEU capacity). With 396 vessels, of which 91 owned, CMA CGM say they intend to continue to ensure the cost controls introduced in 2009 are maintained whilst their position as a global leader in container shipping is maintained. The cash injection from Yildirim, who considered CMA CGM a better investment than Hapag Lloyd apparently, helped turn the tide for the company.