Quantum leap in shipping company CMA CGM’s third quarter result
The third quarter marked recovery in demand for transportation of goods and CMA CGM made good use of this. The company saw its net income increase almost thirteen-fold from USD 45 million in the third quarter last year, to USD 567 million this year.
The net income in the second quarter of 2020 amounted to USD 136 million. Volumes carried during the third quarter of 2020 continued to recover and were up 16.8 per cent compared with the second quarter of 2020.
Compared to the third quarter of 2019, volumes were up by just 1 per cent (5.53 million TEU to 5.59 million TEU). However, due to price increases, turnover grew by more than 6 per cent. EBITDA improved to USD 1.7 billion, representing a 68 per cent increase compared with the third quarter of 2019.
Declining oil prices and cost cuts
Unit cost by TEU was down -6.8 per cent compared with the third quarter of 2019, at USD 845 due to the combined impact of declining oil prices and the company’s cost-cutting initiatives, notably in transportation and intermodal services. As a result, the shipping company has seen a 205.7 per cent increase in its operating margin to USD 978 million.
Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, speaks about ‘very strong financial and operating performances’ and says: ‘This crisis has also demonstrated the solidity of our business model and demonstrated the relevance of our strategy, combining logistics solutions with transport offering. In a context of strong demand for the coming months, we will continue to respond with agility to the needs of our customers.’
Further improvement expected
During the fourth quarter, CMA CGM says maritime activity is more sustained than during the third quarter due to the ongoing increase in volumes. The company adds: ‘This momentum is particularly marked in the United States and Latin America and allows the fleet to continue operating at full capacity as during the third quarter. As a result, freight rates remain high. In this favorable environment and thanks to the ongoing control of unit costs, the Group should see a further improvement in the EBITDA margin in the fourth quarter.’
Picture by CMA CGM.