• 2020 November 21 11:38

    Third quarter 2020 business activity strong CMA CGM Group operating performance

    The Board of Directors of the CMA CGM Group, a world leader in shipping and logistics, met today under the chairmanship of Rodolphe Saadé, Chairman and Chief Executive Officer, to review the financial statements for the third quarter of 2020.

    Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, commented: “In a favorable market environment for our industry, the Group reported very strong financial and operating performances due to the full commitment of its teams. Our shipping activity has seen a significant increase in volumes transported compared to the second quarter of 2020, and CEVA's transformation plan starts to bear fruit. 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.”

    Business activities and financial performance of the third quarter of 2020

    The CMA CGM Group demonstrates strength and agility in an unprecedented global context

    The third quarter business activities saw a marked recovery in demand for transportation of goods, following the scaling back triggered by the Covid-19 pandemic during the first half of the year. In response to this recovery, the CMA CGM Group stepped up the redeployment of operated capacities during the third quarter, once again demonstrating the agility of its business model and the commitment of its employees.

    This increase in volumes transported was due to:

    • the pick-up in global economic activity following the easing of various lockdown measures;
    • the strong momentum in terms of the consumption of goods to the detriment of services activities, encouraged in some locations by support packages;
    • strong e-commerce growth with inventory rebuilding;
    • the usual seasonal variation in business activity in preparation for both the September and Christmas peak consumption periods in western countries.

    Strong financial indicators for the Group

    During the third quarter of 2020, the CMA CGM Group showed great responsiveness to support recovery in the sector. The health crisis has confirmed the relevance of the Group's strategy in terms of the complementarity between logistics solutions and maritime transport.

    Group revenue was up by more than 6% during the third quarter of 2020 compared with the third quarter of 2019, reaching a level of USD 8.1 billion.

     

     

     

     

     

    During the third quarter of 2020, the CMA CGM Group reports yet another solid improvement in Net Income Group share, with profits of USD 567 million, compared with USD 45 million during the third quarter of 2019 and USD 136 million during the second quarter of 2020.

    The Group’s operating performance generated an operating cash flow in excess of USD 1.8 billion, i.e. USD 814 million more than during the third quarter of 2019. The Group’s liquidity stood at USD 2.8 billion on September 30, 2020.

    Shipping: strong EBITDA growth of +76%

     

     

     

     

    Volumes carried during the third quarter of 2020 continued to recover and were up 16.8% compared with the second quarter of 2020. Volumes were also up 1% compared with the third quarter of 2019. Revenue for the quarter increased by 6.3% compared with the third quarter of 2019, totaling USD 6.3 billion for shipping, thanks to average revenue per TEU (twenty-foot equivalent unit) of USD 1,120, up 5.2% year-on-year, in particular on Transpacific trade lanes.

    Shipping EBITDA grew by an impressive 76% during the third quarter of 2020 to USD 1.5 billion (versus USD 870 million during the third quarter of 2019). Unit cost by TEU was down -6.8% compared with the third quarter of 2019, at USD 845 due to the combined impact of declining oil prices and the Group’s cost-cutting initiatives, notably in transportation and intermodal services. As a result, the Group has seen a strong 205.7% increase in its operating margin to USD 978 million.

    Logistics: a transformation plan which is bearing fruit



     

     

     

     

    CEVA Logistics continues to recover and is on course with its transformation plan. The effects observed in the second quarter of 2020 continued and improved during the third quarter.

    The revenues of the Group's logistics subsidiary stood at USD 1.9 billion in the third quarter, up 7.9% from the third quarter of 2019. EBITDA stood at USD 167 million, up 18.4% from the third quarter of 2019, and up from the second quarter of 2020 (USD 153 million).

    This performance was mainly supported by the turnaround in contractual logistics activities (warehousing solutions and related services) following the reopening of sites closed in the second quarter due to the health crisis. Airfreight momentum also remained strong with favorable margins despite the significant reduction in air traffic.

    The operating margin recovered from USD 12 million in the third quarter of 2019 to USD 39 million in the third quarter of 2020. Finally, the contribution of CEVA Logistics to net income Group share stood at USD 1 million compared to - USD 44 million in 2019.


    Highlights for the third quarter of 2020

    Liquefied Natural Gas, a pioneering choice for a new generation of container ships

    On September 22, the CMA CGM JACQUES SAADE joined the fleet. The Group's new flagship is the world's largest container ship powered by liquefied natural gas (LNG). The CMA CGM Group is firmly committed to the energy transition in maritime transport and is rolling out a plan aimed at providing the Group with a fleet of 26 LNG-powered ships by 2022. Liquified gas is an energy of the future, which preserves air quality by removing 99% of sulfur oxides, 91% of particulate matters and 92% of nitrogen oxide emissions. It enables the reduction of CO2 emissions by up to 20% compared with standard fuel oil engines.


    Development of expertise in air freight

    Building on its strategic development in logistics, the CMA CGM Group intends to increase its expertise in air freight. The CMA CGM Group has therefore signed a memorandum of understanding for the acquisition of a 30% stake in Groupe DUBREUIL Aéro (France's leading private airline group, owner of the airlines Air Caraïbes and French Bee). This transaction is subject to review by the competition authorities.

    Outlook

    Strengthening of the Group's financial structure

    In October, the Group went ahead and issued bonds worth EUR 525 million and prepaid its outstanding bonds due to mature in 2021.

    In addition, and in line with its debt reduction strategy, the CMA CGM Group will prepay USD 750 million of various debts in the coming weeks. These include the NOL (now CMA CGM Asia Pacific Limited) notes due to mature in 2021.

    Both rating agencies S&P and Moody's have adopted a favorable outlook on CMA CGM's debt rating (B + and B2 respectively).

     

     

    Ongoing momentum in world trade and earnings outlook

    During the fourth quarter, maritime activity is more sustained than during the third quarter due to the ongoing increase in volumes. 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.

    About CMA CGM

    Led by Rodolphe Saadé, the CMA CGM Group is a world leader in shipping and logistics.

    Its 538 vessels serve more than 420 ports around the world, on all five continents. In 2019, they transported nearly 22 million TEU (twenty-foot equivalent units) containers. With CEVA Logistics, a world leader in logistics services, CMA CGM handles more than 500,000 tons of airfreight and 1.9 million tons of inland freight every year.

    CMA CGM is constantly innovating to offer customers new maritime, inland and logistics solutions.

    Present on every continent and in 160 countries through its network of 755 offices and 750 warehouses, the Group employs more than 110,000 people worldwide, of which 2,400 in Marseille where its head office is located.




2020 November 27

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18:05 CLdN adds 2nd call on Zeebrugge - Cork route
17:47 Seagoing vessels mooring at North Sea Port will now pay a single tariff for the entire cross-border port area
17:26 FESCO delivered extra heavy power equipment from Russia to Bangladesh
17:05 LR, Anemoi and SDARI join forces on rotor sail designs
16:39 Interested parties invited to submit offers on development of deepwater terminal in Świnoujście
16:14 Sea-Cargo starts new freight service via Gothenburg
15:50 Yantar shipyard delivers new trawler of Project SK-3101R
15:48 Mikki Koskinen elected as the new Chairman of Finnish Shipowners’ Association
15:36 Head of Delo Group outlined tasks for updated composition of TransContainer BoD
15:15 IHM Certification for UK flag ships subject to PSC inspection at EU ports
14:48 IADС continues partnership with organizers of Hydraulic Engineering Structures and Dredging Congress
14:14 Wilhelmsen awarded funding for Singapore 3D printing project
13:59 World Maritime University and Batumi State Maritime Academy signed MoU
13:33 Bunker prices recover in the Far East ports of Russia (graph)
13:14 Fully integrated Wärtsilä Hybrid Solution selected for new Misje Rederi bulk carriers
12:50 BW Lilac to deliver its first LNG cargo to Klaipėda LNG terminal
12:25 Russian Maritime Register of Shipping takes part in ROOGD-2020
12:01 The world’s first LPG-fuelled vessel has set sail
11:31 Port of Southampton to open new cruise terminal for 2021 season
11:07 DEME awarded the prestigious Abu Qir port project in Egypt
10:44 Main engines loaded on General Chernyakhovsky ferry being built by Rosmorport’s order
10:17 Austal Australia cuts metal on third of six cape class patrol boats for Royal Australian Navy
10:15 2020 season of shipping through Volga-Baltic locks is over
09:51 Equinor and partner reach financial close on world's biggest offshore wind farm
09:36 Baltic Dry Index as of November 27
09:31 MABUX: Bunker Market this morning, Nov 27
09:22 Oil prices decrease on uncertainty over OPEC+ deal

2020 November 26

18:31 Port of Houston is now the number one port in U.S. in terms of total waterborne tonnage
18:00 Port of Rotterdam to embark on 100 innovative pilot projects
17:51 RF Navy’s frigate Admiral Gorshkov performs tests in the White Sea
17:27 DFDS and its partners apply for EU support for development of hydrogen ferry
17:24 Rosneft conducts stratigraphic drilling on Arctic shelf
16:59 RF Navy's corvette Boykiy completed missions in the English Channel
16:27 RF State Duma approves lifting the ban on storage of agricultural chemicals in ports
16:03 MacGregor reaches OnWatch Scout milestone
15:25 APM Terminals Gijon responds to doubling of container volumes
14:58 Western Shipyard boosts its vessel repair capacity
14:33 Keppel secures contract worth about S$100 million for FPSO project
14:29 EU funds to dredge the navigation channel up to -15 meters in Klaipeda Port
14:02 BC Ferries to trial two ship service on Campbell River – Quadra Island route
13:48 Andrey Severilov elected as Chairman of FESCO BoD
13:30 The Danish Armed Forces and DFDS enter into an agreement on providing ships for the transport of military equipment
13:22 MPA invites market specialists to join its International Safety@Sea Webinar Series
13:02 Fincantieri with the fishing association “Federpesca” to revive the national fishing economy
12:24 Rosneft completed survey and design stage of the project to a port in Sever Bay
12:01 APM Terminals Apapa continues equipment investment programme
11:31 Huntington Ingalls Industries awarded contract for construction of first two Columbia-class submarine modules
11:06 Aquila Power Catamarans rolls out its redesigned sport power catamaran
11:06 Maqta Gateway and TruKKer to collaborate on digital truck booking services through “MARGO”
10:55 New Alfa Laval CM wireless condition monitor boosts process uptime while protecting plant equipment
10:26 BPA: Gov't one year spending review
10:04 Volvo Penta’s transformation for the marine commercial professional of today and tomorrow
09:50 50 vessels and up to 100 drilling units to service Vostok Oil project
09:27 MABUX: Bunker Market this morning, Nov 26
09:24 Oil prices rise close to the level of March
09:10 Baltic Dry Index as of July 7
09:01 BPA calls for government to back a better connected Britain

2020 November 25

18:53 US to impose tough Port State Control measures on Cyber risk management
18:37 CMA CGM to launch SEAPRIORITY EXPRESS service connecting Yantian with Los Angeles