CMA CGM Lost $223.8 Million in Third Quarter

CMA CGM lost $223.8 million in the third quarter despite revenue rising 2.8 percent year-over-year, squeezing the carrier's net profit to $13.2 million in the first nine months of the year.

CMA CGM’s increase of revenue to $3.86 billion trailed a 10 percent jump in the French ocean carrier’s traffic to 2.6 million 20-foot equivalent units.

Revenue in the first nine months was 5.2 percent higher at $11.09 billion, and traffic grew 9.4 percent to 7.42 million TEUs. The world’s third largest carrier earned $672 million before interest, tax, depreciation and amortization in the first three quarters. 

“The market’s current overcapacity, combined with slower demand, is impacting our financial performance,” said Michel Sirat, chief financial officer of the CMA CGM Group.

“Our size and ultra-modern fleet are enabling us to successfully weather this situation and we have undertaken immediate, solid, effective measures to adjust conditions ahead of the expected market turnaround in 2012.”

The privately held company has targeted $400 million of annual cost cuts by rationalizing lines and capacity, renegotiating vessel charter rates, improving vessel fuel efficiency and selling ships and other container assets.

CMA CGM said it expects to see an upturn in demand in 2012 “led by the persistent growth in the container shipping industry, which is steadily gaining market share from other transport modes, and the market-driven moves to rationalize current shipping lines.”

CMA CGM announced it will partner with Mediterranean Shipping Co., the world’s second largest carrier, on key liner routes including Asia-Europe, Asia-Southern Africa and South American trades. The agreement “is designed to substantially improve the group’s performance and generate major operating synergies.”

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.