Tuesday, November 13, 2018

Global Logistics Group Releases Financial Figures after Tie Up with Container Shipping Giant

Problems in Italy Impact Final Figures for First 9 Months of 2018
Shipping News Feature
SWITZERLAND – NETHERLANDS – WORLDWIDE – Ceva Logistics has released financial figures for the third quarter of 2018, the first since tying up with container shipping giant CMA CGM, and has updated its figures for the first 9 months of 2018. The group refinanced in August and the numbers make interesting reading.

Whilst revenue is up year to date 5% ‘in constant currency’ set against 2017 the underlying trend is downward, in part certainly due to the tremendous difficulties the company has suffered in the Italian market. Revenue in Q3 has actually only risen 1.6% from $1,782 to $1,810 whilst EBITDA for the same period is down 58%, from 69 to 29.

Contract Logistics EBITDA was $7 million for the three months ended 30 September 2018 compared with $43 million in the same quarter of 2017. Of those Italian operations two contracts in Italy and the bankruptcy of a local Italian partner for temporary staff resulted in additional unplanned costs of $26 million in the third quarter and $42 million for the first nine months.

Ceva says a plan is currently being executed to address and resolve the issues in Italy. For the first nine months of 2018, revenue in Contract Logistics overall increased by 3.4% in constant currency and EBITDA was $84 million, down $29 million in constant currency year-on-year.

Other parts of the operation fared a little better with Freight Management increasing by 4.9% on a reported basis and by 6.8% in constant currency in the third quarter of 2018 compared to the same period in the prior year. Freight Management EBITDA decreased by $3 million at constant currency to $22 million in the third quarter of 2018 with better revenues offset by challenges in North America relating to the increased cost of transportation in road based haulage services business due to driver shortages.

Ceva is certainly happier about its 50/50 joint venture with Chinese automotive logistics group Anji. Anji-Ceva revenue for the first nine months of 2018 was $1,069, up 17.6%, fuelled it is claimed, by strong volumes growth in existing contracts, new contract implementations and the transfer of the Chinese Ceva CL business in July 2017.

In particular the new Non-Automotive Division of Anji-Ceva is said to be gathering pace and winning significant new business. EBITDA for the first nine months of 2018 was $99 million including a capital gain from a fixed asset disposal of $28 million in Q3 2018 compared to a capital gain of $12 million in Q3 2017. Xavier Urbain, Ceva CEO, commented:

"CEVA continues to reduce its cost base, with a strong focus on productivity addressing underperforming activities both in FM and CL. Most of our operations continue to perform well and our new business performance is promising. However, in the third quarter, margins have been adversely impacted by one-time provisions taken in Contract Logistics in Italy.

”Looking ahead, we are confident that we will further improve our performance and meet our medium-term targets. More importantly, we plan to intensify the cooperation with our strategic partner CMA CGM which will bring additional value for all our stakeholders.”