French ocean carrier increased container volumes 10.8 percent compared to first quarter 2014.
CMA CGM, the third largest container shipping company after Maersk Line and Mediterranean Shipping Co., reported net profits of $406 million in the first quarter of this year compared with $97 million in the same 2014 period.
Container volumes for the ocean carrier were 3.1 million TEUs, a 10.5 percent increase compared to the same period last year, but revenues rose just 1.8 percent to $4.01 billion in the first quarter of 2015.
CMA CGM said the rise in volumes “chiefly results from the increase in volumes on the East-West lines, particularly to and from the US, where volumes enjoyed sustained growth, and also from the launch of the Ocean Three Alliance.” CMA CGM’s partners in the Ocean Three Alliance are United Arab Shipping Co. (UASC) and China Shipping Container Lines (CSCL).
The French liner giant said it continued to “actively optimize its lines, opening five new routes in the US and extending its agency network up to 655 agencies in over 160 countries.”
“Spot freight rates for Asia-Europe lines have been rather volatile since the Chinese New Year; volumes remain sluggish however,” CMA CGM reported. “Lines to and from the US continue to perform well. In view of the diverse nature of its lines and customer portfolio, the impact of these factors on CMA CGM in the immediate term should be limited.”
The company said it “continued to roll out its balanced financial strategy over the first quarter, aimed at strengthening its financial flexibility while pursuing controlled expansion to deliver further growth.”
Adjusted net debt fell by 10.3 percent, which CMA CGM said was “chiefly due to the favorable impact of the dollar to euro exchange rate and to the increase in the Group’s cash available. Consolidated adjusted net debt now represents less than half consolidated adjusted equity.”
Last week, Moody’s Investors Services upgraded the CMA CGM’s rating to B1 from B2, citing the company’s “continued robust operating performance and resulting improvements to its financial profile.”
“We expect these improvements to persist in 2015 in spite of ongoing challenging market conditions in the container shipping segement,” said Marie Fischer-Sabatie, a senior vice president at the financial rating agency.
On 31 March 2015, CMA CGM took delivery of CMA CGM Kerguelen, its first 17,722-TEU vessel designed for use on the Asia-Europe trade lane. Another five similar-sized vessels will also be delivered this year, along with six vessels with a capacity of 9,400 TEUs and three vessels with a capacity of 2,100 TEUs.
Looking further out, CMA CGM said its fleet will be further strengthened with the acquisition of three 20,600-TEU vessels to be delivered in 2017.
In other areas, CMA CGM noted it had obtained the 30-year concession for the container terminal in Kingston, Jamaica and that its logistics subsidiary, CMA CGM LOG, had would be able to accelerate its development in India as a result of its acquisition of LCL Logistix.
Last week CMA CGM LOG signed an agreement under which it will manage a logistics platform in Cuba.
CMA CGM reports sharp increase in profit for first quarter
