CMA CGM reports dip in container volumes for Q2
CMA CGM Group has recorded a decrease in container traffic volumes for Q2 2020 for the first time since 2009 as a result of lockdown measures in several countries.
September 07, 2020: CMA CGM Group has recorded a decrease in container traffic volumes for Q2 2020 for the first time since 2009 as a result of lockdown measures in several countries. This resulted in the shutdown of production units, in particular in China, during the first quarter. This was then followed by a sharp downturn in global consumer demand in March and April.
All supply chains were able to adapt to avoid disruption and deliver supplies—especially medical equipment. As lockdown measures were gradually lifted, carried volumes bounced back strongly as of May under the combined effect of inventory rebuilding and the sharp recovery in the consumption of goods, notably in the United States.
Rodolphe Saade, chairman and chief executive officer said, “We have significantly reduced our costs and benefited from the drop in oil prices. CEVA Logistics’ turnaround plan is underway and in line with our expectations. During this public health crisis, preserving the safety of our employees was a top priority. Our teams have been working hard to ensure the group’s and customers’ business continuity. Our expertise has been especially useful in combating Covid-19 by developing sea and logistical bridges to supply essential medical equipment. Third quarter results should mark a new improvement in our performance.”
During the second quarter of 2020, CMA CGM improved profitability in all its business activities. Revenue for the period reached $7.0 billion, down 9 percent compared with the second quarter of 2019, due to a slowdown in volumes related to the impact of the global public health crisis on international trade.
The group’s operating performance generated operating cash flow in excess of $1.1 billion. Moreover, its liquidity was further strengthened by securing a EUR 1.05 billion guaranteed bank loan, EUR 300 million of which was allocated to the CEVA Logistics capital increase.
As a result, the group’s liquidity position (available cash and undrawn credit lines) totaled USD 2.6 billion at June 30, 2020, allowing it to comfortably meet future financial obligations.
Shipping EBITDA grew by 30 percent during the second quarter of 2020 at $1,052 million (vs. $808 million during the second quarter of 2019). Unit cost by TEU was down 4.6 percent compared with the second quarter of 2019, at $892 due to the decline in oil prices, the group’s cost-cutting initiatives and the reduction in the fleet of vessels and containers deployed.
The Covid19 crisis has confirmed the relevance of our strategy of offering complementary shipping and logistics services, such as CEVA Logistics’ commercial airfreight and warehousing solutions. The second quarter saw the initial signs of the recovery of the CMA CGM Group’s logistics subsidiary.
The results of contract logistics were penalised during the quarter by the pandemic, which led to the closure of many sites.
Consequently, the group designed the ‘Business Continuity Pack’, a new range of services to offer solutions adapted to customers’ needs during these unprecedented times.
The company via its logistics subsidiary also focused on prioritizing transportation of essential goods, particularly medical supplies, by building logistical bridges to France and several countries across the world. At the same time, the group allocated a special budget to fund community focused initiatives aimed at fighting the Covid-19 pandemic and supporting those most affected by the public health crisis in France, Lebanon, the United States and several African and Asian countries.