[020619.EN.BIZ] CMA CGM to Double Down on Cost-cutting to Adapt to a Changing Market

FRENCH shipping giant CMA CGM narrowed its first quarter net loss from US$77 million in 2018 to $43 million in 2019, drawing on revenues of $7.41 billion, an increase of 37 per cent year on year.

Revenues were boosted by the acquisition of CEVA Logistics, in which the Marseilles-based carrier now holds a 99.4 per cent.

Without the CEVA contribution, revenues were up only 5.5 per cent to $5.41 billion as volumes increased by four per cent to 5.2 million TEU. First quarter operating profit (EBITDA) was down 2.3 per cent at $212 million.

Given the results, CMA CGM plans to continue to focus on cost cutting, and rationalising services as it adapts to a changing market.

The company said it would increase its cost-cutting target from $1.2 billion to $1.5 billion, and will rationalise its service offerings under its CMA CGM, APL and ANL brands.

CMA CGM will become the only brand on the transatlantic, Asia-Europe, Asia-Mediterranean, Asia-Caribbean and Europe-India/Middle East markets.

Singapore-based APL, which has a stronger position on the transpacific trade, will focus on that market and the Asia-Indian subcontinent, where it will be the group's only brand, intra-Asia, Asia-Oceania, and US flag services. ANL will focus on Oceania.

CMA CGM also said it was "resolutely committed to CEVA's financial recovery", and had taken major structural decisions paving the way for CEVA's "rapid return to profitability".

Former APL chief executive Nicolas Sartini take over CEVA in June as CEO and has been charged with carrying out a turnaround plan.

Source : HKSG.