The third quarter (Q3) profit of French container transportation and shipping company CMA CGM Group has been affected by rising costs of bunker fuel, according to its Chairman and Chief Executive Officer.
"In a context of sharply rising fuel prices, CMA CGM core EBIT margin recorded a significant increase compared to the second quarter of 2018, at 4.0%,” said Rodolphe Saadé.
“In a market growing by 2.5% to 3%, the increase in volumes shipped by CMA CGM demonstrates our commercial drive and the quality of service offered to our customers.”
Unit costs rose by +7.7% (+USD 77 per TEU), mainly due to the market price of fuel, resulting in an increase of USD 55 per TEU compared to the third quarter of 2017.
“This was only partially offset by the introduction of an Emergency Bunker Surcharge,” notes the company.
CMA CGM posted Q3 2018 operating income of USD $241 million, representing a core EBIT margin of 4.0%, as compared to 1.2% in the previous quarter; the performance is the result of the group's ability to leverage its size and global network to maximise revenues despite the rise in fuel price.
The group’s share of consolidated net income amounted to USD $103.1 million in Q3 2018, down 68.1% from consolidated net income of USD $323.3 million in Q3 2017.
Revenue in Q3 2018 was USD $6.06 billion, a 6.3% increase from revenue of USD $5.70 billion in Q3 2017.
Moving forward, CMA CGM says it expects to further raise the cost of shipping rates due to the approaching IMO 2020 regulation.
Related: CMA CGM: IMO 2020 to cost shippers additional $160/TEU
Related: CMA CGM Q2 net income down 89%, affected by rising fuel costs
Photo credit: CMA CGM
Published: 27 November, 2018
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