CMA CGM posts Q2 2020 results
The Board of Directors of the CMA CGM Group, a world leader in shipping and logistics, met to review the financial statements for the second quarter of 2020, the company said in its release.
During the second quarter of 2020, CMA CGM improved profitability in all its business activities. Revenue for the period reached USD 7.0 billion, down 9.0% compared with the second quarter of 2019, due to a slowdown in volumes related to the impact of the global public health crisis on international trade.
EBITDA improved once again, increasing 26.3% compared with the second quarter of 2019, and reaching more than USD 1.2 billion. The EBITDA margin posted impressive gains, reaching 17.2% (vs. 12.4% during the second quarter of 2019). The operating margin was USD 530 million, i.e., 7.6%, versus USD 286 million (3.7%) for the second quarter of 2019.
During the second quarter of 2020, the CMA CGM Group posted positive net income, Group share of USD 136 million, up sharply, compared with a loss of USD 109 million during the second quarter of 2019, and a benefit of USD 48 million during the first quarter of 2020.
The Group’s operating performance generated operating cash flow in excess of USD 1.1 billion.
Moreover, the Group’s liquidity was further strengthened by securing a EUR 1.05 billion guaranteed bank loan, EUR 300 million of which was allocated to the CEVA Logistics capital increase.
As a result, the Group’s liquidity position (available cash and undrawn credit lines) totaled USD 2.6 billion at June 30, 2020, allowing the Group to comfortably meet future financial obligations.
In line with its prudent financial policy, CMA CGM continues to proactively evaluate all potential options to strengthen its financial structure, which may include refinancing opportunities across all available funding sources.
Due to the COVID-19 pandemic, volumes carried during the second quarter of 2020 were down 13.3% compared with the second quarter of 2019, more limited than initially expected. As a result, revenue for the quarter was down 10.9% compared with the second quarter of 2019, totaling USD 5.3 billion for shipping, thanks to average revenue per TEU (twenty-foot equivalent unit) of USD 1,112, up 2.8% year-on-year.
Shipping EBITDA grew by 30% during the second quarter of 2020 at USD 1,052 million (vs. USD 808 million during the second quarter of 2019). The operating margin was up an impressive 86% to USD 497 million, i.e., 9.3%.
Unit cost by TEU was down 4.6% compared with the second quarter of 2019, at USD 892 due to the decline in oil prices, the Group’s cost-cutting initiatives and the reduction in the fleet of vessels and containers deployed. CMA CGM demonstrated its ability to rapidly adapt its deployed capacity to demand, in line with the discipline seen more generally across all industry operators.
The Group’s logistics segment demonstrated its resilience during the past quarter, despite revenue being down 4.7% at USD 1.7 billion, also affected by adverse FX movements. EBITDA increased to USD 153 million, i.e., +4,1% compared with the second quarter of 2019, despite the negative impact of the health crisis on its results estimated at USD 7 million. This limited impact underscores the success of the wide range of measures implemented to offset the negative impact of the public health crisis.
These results benefitted from the strong airfreight business thanks to air charters compensating the absence of regular capacity. Ground activities progressed further on their recovery. This performance offset the weakness of sea freight. The results of contract logistics were penalized during the quarter by the pandemic, which led to the closure of many sites.
The operating margin is strongly growing by 78% to USD 40 million.
Logistics net loss continued to recover during the second quarter, reaching USD -1 million, compared with a net loss of USD 32 million during the second quarter of 2019.
After the Asia – India and Latam trade lanes transfer, the Group announced early July that CMA CGM will become the sole carrier on the Transpacific trade. This decision aims at simplifying the product offering while optimizing the cost base and adapting to the current economic and trade environment.
With this new development, the Group simplifies its brand strategy: CMA CGM becomes the sole global carrier supported by expert brands:
APL, as the expert in U.S. Government cargo;
ANL, as the leader in Oceania;
CNC, as the intra-Asia short-sea specialist;
Mercosul Lines, as the Brazilian cabotage expert
Containerships, as the multimodal transport intra-European leader
