2:47 AM, February 24, 2024

CMA CGM books record revenue but oil price hits earnings

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French container shipping group CMA CGM booked record revenue in 2018 as trans-Pacific goods traffic remained buoyant despite US-Chinese trade tensions, but soaring oil prices cut deep into its profits, it said in a recent announcement.

The firm’s 2018 volumes rose by 9.3% and for the first time exceeded 20 million TEUs (twenty-foot equivalent units) due to a strong performance of most of the shipping lines operated by the group, in particular the Transpacific, India/Oceania and Africa lines.

Full-year revenue grew 11.2% to a record $23.48bn, with fourth-quarter revenue up 14.9% to $6.3bn. But fuel prices rose 33% in 2018, cutting deeply into the firm’s core earnings before interest and taxes, which plunged to $610m from $1.57bn in 2017. Net profit was just $34m from $697m.

The company said in a statement the trade outlook was positive for 2019, despite geopolitical tensions. In a bid to improve profitability, the firm is launching a new $1.2bn cost-reduction plan.

The family-owned, unlisted group is the world’s fourth-largest container shipping line. It is also developing a presence in land logistics after becoming the largest shareholder in Swiss firm Ceva Logistics.

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