Bruce Barnard, Special Correspondent | Mar 07, 2012 10:46AM EST
CMA CGM swung to a net loss of $30 million in 2011 from a $1.6 billion profit in 2010 but the French ocean carrier said cost savings and lower ship charter rates will return it to the black this year.
Revenue was up 4 percent to $14.87 billion as traffic grew 11 percent against market growth of 6.5 percent to an all-time high of just more than 10 million 20-foot equivalent units.
The world’s third largest carrier earned $711 million before interest, tax, depreciation and amortization last year, which is down from $2.5 billion in 2010.
CMA CGM’s loss is noticeably less than that of rival carriers, including market leader Maersk, which lost $602 million in 2011.
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“Once again this year CMA CGM has demonstrated its strong resilience at a time of intense turmoil in our industry,” said Rodolphe Saade, CMA CGM Group Executive. “Our operating and financial performances were among the best in the industry.”
Although the beginning of 2012 was difficult for the entire industry, “freight rates are now trending upwards, especially outbound Asia,” the Marseille-based carrier said.
An ongoing cost reduction plan will deliver $400 million in savings in 2012 and lower ship charter rates will reduce operating costs by $80 million.
CMA CGM said this will enable it to post a profit in 2012 “in a market that is difficult to predict given the scheduled arrival of a large number of new vessels and further increases in bunker costs.”
The carrier said it met with its bankers on March 6 to “discuss the volatile market situation and its consequences.”
CMA CGM said it will strengthen its market positions, especially in Russia, India, Latin America and Africa as well as in reefers.
The carrier plans to continue implementing operating partnerships with Mediterranean Shipping Co. on Asia/Europe and South America trades and with Maersk Line on Asia/Mediterranean, Adriatic and Black Sea trades.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
