French container line operator CMA CGM has followed up on its strong 2014 profit performance with a spectacular first quarter one, posting net profits up more than fourfold year on year to USD406 million.
The result compares with a USD97 million net profit in the first quarter of last year and a USD584 million full-year net surplus last year that the group attributed to an increase in volume carryings and sharply reduced financial costs.
In the first quarter of this year, volume carryings increased 10.5% year on year to 3.1 million teu as the group felt the benefits of an increase in cargo flows on east-west and US lines, as well as the positive impact of the start of operations by the Ocean Three alliance.
Revenues rose a comparatively modest 1.8% to USD4.01 billion, however, even though core earnings before interest and tax (EBIT) more than doubled to USD406 million.
The group attributed its strong profit performance to operating efficiency and cost discipline, as well as a sharp drop in bunker prices that brought bunker costs per teu down by 36.5%.
Adjusted net debt also fell 10.3%, helped by the positive impact of the dollar-euro exchange rate and an increase in cash available. As a result, consolidated net debt fell from 0.55% of capital at the end of the year to 0.46% at the end of the first quarter.
The group gave no further details regarding the composition of its net result and was coy about its expectations for the rest of the year.
It indicated Asia-Europe lines had been volatile since the Chinese New Year and that volumes had been “sluggish”, while lines in and out of the United States had continued to perform well.
It was guardedly optimistic about its prospects, saying, “In view of the diverse nature of its lines and customer portfolio, the impact of these factors on CMA CGM in the immediate term should be limited.”