CMA CGM sees further profit rise in H2

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French-based container shipping group CMA CGM said it expects second-half operating profits to exceed the first-half as the overall market improves and the company benefits from the integration of its APL line acquisition.

CMA CGM, the world’s third-largest container shipping firm, reported a core operating profit of $472 million on Friday, up from $252 million in the first quarter and against an $81 million loss in the year-earlier period.

Second-quarter sales rose by 57 percent to $5.55 billion, supported by a 33 percent increase in shipped volumes and a 12.5 percent rise in average revenue per container, CMA CGM said in a statement.

Core operating margin reached 8.9 percent, up from 5.5 percent in the first quarter and minus 2.3 percent a year earlier.

APL, which was consolidated in June 2016 in CMA CGM’s biggest ever acquisition, also remained profitable in the second quarter, with a $137 million contribution to group operating profit.

The $2.4 billion takeover of APL is one of a series of consolidation deals in the past two years as container lines have sought to recover from a severe downturn linked to vessel overcapacity and tepid economic growth.

Other container lines have also pointed to an improvement in conditions this year, with market leader Maersk Line saying last month that fundamentals were at their strongest since 2010.

CMA CGM said the recent upward trend in freight rates had led it to expect higher second-half operating profits compared with the first half, excluding significant variations in fuel costs and exchange rates.

The privately owned firm said its unit costs were stable in the second quarter compared with a year earlier as it offset a 60 percent rise in fuel costs with measures under an ongoing savings plan and gains from the integration of APL.
Source: Reuters

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