Thursday, August 22, 2013

Supply Chain and Logistics Group Reports Q2 and Goes for Paperless Airfreight

Recapitalisation Gives a Different Look to Balance Sheet
Shipping News Feature

WORLDWIDE – Following its recapitalisation in early May, which the company says both eliminated around half of its consolidated net debt and thereby slashed cut interest costs proportionately, supply chain and logistics group Ceva produced figures for Q2 to June 2013 showing EBITDA thus doubling to $80 million as $1.6 billion of debt disappeared from its balance sheet (excluding the restructuring and legal costs involved during recapitalisation). In other company news the group has also recently signed up to the IATA electronic Air Way Billing (e-AWB) scheme in a significant move toward paperless airfreight.

Ceva saw revenues drop in the three months to the end of June, $2,148 million from $2,291 (down 6.2%) in the previous year, when the total had been adjusted for disposals, but higher than Q1’s $2,117. Revenue in Freight Management declined 11.7% mainly due to lower airfreight volumes in ‘challenging market conditions’ while revenues in contract logistics declined by 1.4% (adjusted for the impact of disposals) as a strong performance in the US  was offset by the impact of several contracts that were terminated as part of the group’s cost reduction programme and lower volumes in several markets, notably in parts of Europe. CEO Marvin O. Schlanger issued a statement, saying:

“I am pleased to report that the steps we are taking to restructure the company’s balance sheet and address its cost base are already delivering strong results. In the face of executing our recapitalisation and relatively difficult market conditions, we were able to double adjusted EBITDA sequentially and approach our results from last year.

“We have created momentum in the marketplace as our customers recognise that Ceva is better positioned to meet the challenges ahead and better able to leverage our unique capabilities to meet their needs. We will continue to focus on increasing our sales to take advantage of our stronger position.”

In other company news Ceva announced it has joined other leading freight forwarders by signing up to the International Air Transport Association (IATA) to electronic Air Way Billing (e-AWB) scheme. The company says it has moved one step closer to achieving paperless airfreight operations and is just one more way that the company is looking to minimise its impact on the environment. Paperless airfreight will help increase the efficiency, accuracy and speed of processing freight while reducing error rate and costs for Ceva and its customers.

The e-AWB agreement essentially replaces the hard copy terms and conditions previous on the reverse of the paper Air Way Bill and as such is signed by all freight forwarders participating in the scheme. According to IATA the freight forwarding industry currently ships 7,800 tonnes each year in shipment documentation alone. Ceva will be piloting the process in four locations: New York, Atlanta, London and Frankfurt, with the aim of rolling out e-AWB to its entire network, which spans over 160 countries worldwide, by 2015. Peter Baumgartner, Ceva’s VP Global Air Procurement, said:

“This agreement with IATA is an exciting step towards operating in a completely paperless airfreight environment. We believe that by using e-AWB we will be able to process freight more efficiently, accurately and quickly, while at the same time eliminating the unnecessary use of paper, delivering environmental benefits to Ceva and our customers.”