Marked recovery in volumes transported in shipping and logistics activities
CMA CGM Group has released its financial statements for Q3, 2020. Shipping activity saw a significant increase in volumes transported compared to Q2, 2020, and CEVA’s transformation plan started to bear fruit. In response to this recovery, the CMA CGM Group stepped up the redeployment of operated capacities.
Group revenue was up by more than 6.0% during Q3, 2020 compared with Q3, 2019, reaching US$8.1 billion. EBITDA (before capital gains/(losses) on the disposal of fixed assets and subsidiaries) improved 68.0% to US$1.7 billion. The EBITDA margin continued to rise, reaching 21.0% (versus 13.3% during Q3, 2019). The operating margin reached US$1.0 billion, i.e., 12.6%, versus US$332.0 million (4.4%) for Q3, 2019.
Shipping volumes carried during Q3, 2020 continued to recover and were up 16.8% compared with Q2, 2020. Volumes were also up 1.0% compared with Q3, 2019. Revenue for the quarter increased by 6.3% compared with Q3, 2019, totalling US$6.3 billion for shipping, thanks to average revenue per TEU (twenty-foot equivalent unit) of US$1,120, up 5.2% year-on-year, in particular on Transpacific trade lanes. Shipping EBITDA grew by an impressive 76.0% to US$1.5 billion. Unit cost by TEU was down -6.8% compared with Q3, 2019, at US$845 due to the combined impact of declining oil prices and the Group’s cost-cutting initiatives, notably in transportation and intermodal services. As a result, the Group has seen a strong 205.7% increase in its operating margin to US$978.0 million.
CEVA Logistics continued to recover and is on course with its transformation plan. The effects observed in Q2, 2020 continued and improved during Q3. The revenues of the Group’s logistics subsidiary stood at US$1.9 billion in Q3, up 7.9% from Q3, 2019. EBITDA stood at US$167.0 million, up 18.4% from Q3, 2019. This performance was mainly supported by the turnaround in contractual logistics activities (warehousing solutions and related services) following the reopening of sites closed in Q2 due to the health crisis. Air freight momentum also remained strong with favourable margins despite the significant reduction in air traffic. The operating margin recovered from US$12.0 million in Q3, 2019 to US$39.0 million in Q3, 2020.
Looking ahead, building on its strategic development in logistics, the CMA CGM Group intends to increase its expertise in air freight. The CMA CGM Group has therefore signed a memorandum of understanding for the acquisition of a 30.0% stake in Groupe DUBREUIL Aero (France’s leading private airline group, owner of the airlines Air Caraibes and French Bee). This transaction is subject to review by the competition authorities. During Q4, maritime activity is more sustained than during Q3 due to the ongoing increase in volumes. This momentum is particularly marked in the US and Latin America and allows the fleet to continue operating at full capacity as during Q3. As a result, freight rates remain high. In this favourable environment and thanks to the ongoing control of unit costs, the Group should see a further improvement in the EBITDA margin in Q4.