Wednesday, September 1, 2010

CMA CGM Latest Major Sea Freight Group To Lodge Performance Figures

French Container Specialists Continue the Upward Trend
Shipping News Feature

FRANCE – Following hard on the heels of other major shipping powers like AP Moeller Maersk, French group CMA CGM, who have been among the most troubled of the container companies in recent months, today produced their first half interim figures for 2010,and,as with the rest, they show a rise in revenue.

In addition to the year on year comparative revenue jump, 41% up to $6.8 billion, there was a satisfying rise in TEU throughput, up 22% at 4.4 million. CMA CGM put the revenue/traffic balance down to superior management strategy (naturally) claiming that their lower fixed-cost base resulted in one of the shipping industry’s highest operating margins (EBITDA), at 15.5% for the first half and 18.8% for the second quarter alone.

According to a company statement the principal factors behind the profitability was their continuing commitment to push ahead with their strategic decisions to invest in large containerships and to deploy a cost-reduction plan, although they concede that other contributing factors were the upturn in the global economy, which drove an increase in both volumes carried and freight rates, plus the strong commitment of group staff.

Regular readers will know that the group have continued to take delivery of new builds in the past few months, all very large container ships up to 13,800 TEU capacity, which CMA CGM insist is necessary to keep pace with increased freight volumes. They do admit however that competition is stiff and have undertaken to reduce costs and say they are ‘pursuing discussions with investors with the objective to reinforce equity’, a comment that may bring recent memories back to investors, and indeed after enforced management changes a reminder of longer term difficulties.