FRENCH shipping giant CMA CGM Group has posted a net loss of US$229 million for 2019, compared with a profit of $34 million in 2018.
The French transport group's result was
dragged down by the $329 million negative impact of new accounting rules
on vessel time charters and a $140 million loss by Ceva Logistics.
However, the world's fourth-largest container shipping firm remains
bullish about its liner trade outlook and its ability to turn around the
loss-making logistics arm, despite the adverse effect of the
coronavirus outbreak on Chinese exports, reports The Loadstar, UK.
Turnover at the group soared 29 per cent on the previous year, to $30.3 billion, boosted by $7.1 billion in revenue from Ceva.
Container liftings on its fleet of 502 vessels increased by an
above-industry par of 4.1 per cent, to 21.6 million TEU, which CMA CGM
attributed to growth in its shortsea business, "strong growth" in
intra-Asia and "organic growth" in the African and Latin American
trades.
"After an extremely robust January, the early part of the year has been
marked by the Covid-19 crisis," it said, and added: "There has been an
upturn in volumes, and a major catch-up effect is expected once the
health situation stabilises, as western countries will be seeking to
rebuild their inventories".
CMA CGM said it expected to return to "normal capacity as of mid-March"
out of China, as it reactivates its network following the crisis.
Chairman and chief executive Rodolphe Saade tweeted: "I observe an
upturn of the economic activity in China; 80 per cent of the
manufacturing units are again operational. And every day, more open. We
are anticipating a rebound in volumes related to restocking."
Indeed, the Ocean Alliance has reinstated some blanked sailings this
month, after an earlier-than-expected recovery in manufacturing and
trucking. A carrier source told The Loadstar last week it had been
"pleasantly surprised" by the firm booking forecasts for the coming
weeks.
"Cargo is coming back onstream much earlier than we had expected in
China, so we will be rehashing the number of loaders for the second half
of March," he said.
Meanwhile, CMA CGM is persevering with its goal of turning the Ceva
acquisition from a negative asset to a positive for the group.
In its "second-phase turnaround plan" for the logistics business, it
said it was "pursuing its strategic transformation plan, aimed at
delivering strong revenue growth combined with a significant improvement
in its profitability".
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