CMA CGM suffers net loss of US$30 million in 2011 as revenues rise 4pc

2012 03 09

MARSEILLES' CMA GGM, the world's third biggest container shipping line after Maersk and MSC, has posted a net loss of US$30 million against a $1.6 billion profit in 2010 despite last year's four per cent revenue increase to $14.87 billion.

Container volume was up 11 per cent against market growth of 6.5 per cent reaching a record high of 10 million TEU.

CMA CGM continued to dispose of non-strategic assets, said the company, further strengthening its balance sheet by issuing $500 million in equity notes to the Yildirim Group and raising $945 million in separate dollar- and euro-denominated bond issues.

Disappointing net results were attributed to overcapacity in the trade and a steep rise oil prices, with bunker costs soaring 34 per cent year on year.

"CMA CGM nevertheless enjoyed a satisfactory operating performance, thanks to its efficient fleet, global network and sustained cost discipline," said a company statement.

"Although the beginning of the year was difficult for the entire industry, freight rates are now trending upwards, especially outbound Asia. Several shippers, including CMA CGM, have announced and are introducing significant rate increases as from March," said the statement.

CMA CGM plans to continue implementing operating partnerships with MSC on the Asia/North Europe and South America lines and with Maersk on the Asia/Mediterranean, Adriatic and Black Sea trades.

The group will also deploy more efficient, modern and cost-effective vessels on every trade and develop more innovative, high-quality information technology services with IBM.

CMA CGM is also pursuing a cost reduction plan, which is expected to deliver $400 million in savings this year. "In the same way, the decline in charter rates will reduce operating costs by $80 million in 2012," the company said.

Thanks to all these measures, the group expects to report a profit in 2012, in a market that is difficult to predict given the scheduled arrival of a large number of new vessels and further increases in bunker costs.

The group said it remains confident in the future of the industry and will strengthen its position in Russia, India, Latin America and Africa, as well as in the reefer market.

Said CEO Rodolphe Saade: "Once again this year, CMA CGM has demonstrated its strong resilience at a time of intense turmoil in our industry. Our operating and financial performances were among the best in the industry. We set up strategic operating partnerships with MSC and with Maersk to address market challenges and maintained our commitment to controlling costs. We expect the market to improve in 2012, particularly in the second half."

Source Shipping Gazette - Daily Shipping News

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