The French ocean carrier transported 2.9 percent more containers, but saw the average freight rate tumble 17.6 percent when compared to the first quarter of 2015.
Ocean carrier CMA CGM reported a loss of $100 million in the first quarter of 2016 compared to a profit of $406 million in the first quarter of 2015.
Core earnings before interest, taxes, disposals and impairment charges totaled $3 million in the first quarter of this year compared to $406 million in the first quarter of 2015.
The loss came as the third largest container liner company saw revenues for the quarter tumble 15.3 percent year-over-year to $3.4 billion. Revenues fell even though the company carried 3.2 million containers in the first quarter, 2.9 percent more than the 3.1 million containers it carried in the first quarter of 2015, due to average revenue per TEU falling 17.6 percent.
CMA CGM said the increase in volumes was mainly due to growth in the transatlantic and transpacific lines operating to and from the United States. The French carrier also said that offset a decrease in the volumes of cargo carried between Asia and Europe, where it had scaled back its capacity in response to weaker demand.
The acquisition of the European short sea carrier Oldenburg-Portugiesische Dampfschiffs-Rhederei last year also helped boost volumes, the carrier said.
CMA CGM Vice Chairman Rodolphe Saadé said the increase in volumes was above the market average of 1.2 percent, citing an industry growth estimate by industry analyst Drewry.
“We will continue our strict financial discipline, including the implementation of a significant cost reduction plan,” Saadé said. The company has initiated a new plan to cut costs by $1 billion within 18 months.
Saade also noted that CMA CGM is “moving forward on our strategic projects, namely the proposed acquisition of NOL and the creation of a new operational alliance.” The plan to acquire NOL and its APL subsidiary has been cleared by the European Commission and India.
Meanwhile, the new OCEAN Alliance, comprised of CMA CGM, China COSCO Shipping, OOCL and Evergreen is expected to launch next April.
CMA CGM said “The recent trend on the Asia-Europe and Asia-Mediterranean lines shows a slight improvement in its freight rates since 1 May 2016, but the environment remains fragile.”
NEWS FLASH: CMA CGM reports $100m loss in Q1
