CMA CGM announces new step in the governance of the Group and Financial Results for the third quarter 2017
The Board of Directors of the French Group CMA CGM, a worldwide leading shipping company, met to decide the change in governance of the Group and examine the third quarter 2017 financial results, the company said in its press release.
In accordance with the wish of Jacques Saadé and after having reunited the positions of CEO and Chairman of the Board, the Board of Directors has decided to appoint Rodolphe Saadé to the position of Chairman of the Board and Chief Executive Officer of the CMA CGM Group, and Jacques Saadé Founder-Chairman.
THIRD QUARTER 2017: CMA CGM pursues its profitable growth strategy and once again achieves the best operating margin in its sector
Increase in volumes carried +11.6%
Revenues up +27.7%
Core EBIT margin 10%
Net income of 323 million USD
Q3 - 2016 Q3 - 2017 (Nominal) Q3 - 2017 (%var)
Revenue in USD billions 4.47 5.70 27.7%
Core EBIT* in USD millions (86) 568 n.m.
Core EBIT margin (1.9%) 10.0% +11.9pts
Net Income Group share in USD millions (268) 323 n.m.
ROIC (return on invested capitals) (2.5%) 10.4% +12.9pts
Volumes carried in TEU millions** 4.46 4.98 11.6%
Vessel fleet 460 489 +6.3%
Fleet capacity in TEU millions** 2.2 2.5 +12.1%
Gearing 1.57*** 1.24*** -0.33pts
* Core EBIT excluding asset sales and depreciation and non-recurring elements
** TEU = Twenty-foot Equivalent Unit
*** On 30 September
During the third quarter, volumes carried by CMA CGM experienced a strong growth of +11.6% in comparison to Q3 2016. During the period, CMA CGM carried close to 5 million containers, a record figure. This increase can be explained by the strong growth in volumes carried through OCEAN Alliance, on the Asia-USA and Asia-Europe routes, as well as on most of the North-South and Intraregional routes.
The increase in freight rates seen at the beginning of the year has continued through this quarter, enabling an increase of 14.4% in average revenue per container carried.
As a result, revenues in the third quarter of 2017 have sharply risen by 27.7% to 5.7 billion USD.
CMA CGM reported a core EBIT margin of 10.0% to 568 million USD in the third quarter of 2017.
CMA CGM thus maintains its leadership within the sector in terms of profitability. This performance results from the Group's ability to leverage its size and global network to optimize both revenues and costs, despite rising fuel prices.
The consolidated net income Group share reached 323 million USD in the third quarter, up from 219 million USD in the prior quarter, for a net income Group share of 629 million USD since the beginning of the year.
On July 25, CMA CGM signed a concession contract for the new container terminal in Kribi in Cameroon, alongside Bolloré Transport & Logistics and the Chinese group CHEC. This 25-year contract will enable the Group to intensify trading on routes to and from Africa, whose dynamism has benefited the Group for many years.
On September 14, CMA CGM announced its partnership with Aix-Marseille French Tech, a key player in digital innovation in the metropolis of Aix Marseille. Through this partnership, CMA CGM intends to contribute to the development of the region’s already intense digital ecosystem and continue its digital transformation.
On September 19, CMA CGM signed the order for 9 containerships of 22,000 TEUs, for which delivery will begin in 2020. CMA CGM has opted for a liquefied natural gas (LNG) propulsion system. With this innovative technological choice in the shipping industry, CMA CGM asserts its ambition to be a leader in the energy transition of the industry.
In light of the Group's results and the improved outlook for the shipping industry, the rating agency Standard & Poor's upgraded the CMA CGM Group's rating to B+ with a stable outlook; more recently, Moody's adopted a positive outlook of its B1 rating.
On July 9, the Group raised 650 million EUR on the bond markets to refinance the NOL 2017 bond, and in anticipation, the CMA CGM 2018 bond. The Group has also negotiated a new revolving credit facility of 205 million USD, which has been increased to 285 million USD since.
Operating performance for the full year 2017 is expected to show a strong improvement over that of 2016.