CMA CGM reports $48 million profit for 2020-21 first quarter

June 9, 2020: The shipping and logistics company CMA CGM disclosed the financial results for the first quarter (Q1) of this year with an operating margin increase to 13.5 percent and a profit of $48 million.

The board of directors of the CMA CGM Group met under the chairmanship of Rodolphe Saadé, chairman and chief executive officer, to review the financial statements for the first quarter of 2020.

Despite uncertainty, anticipate improvement in Q2
Lockdown measures taken even more in Q2 2020 in response to the spread of Covid-19 around the world are weighing on global consumption and increase uncertainties. The Group expects volumes to decline by about 10% over the first half of the year. Operating performance for the second quarter, however, should show significant improvement thanks to the industry's discipline and the Group's cost control policy.

Rodolphe Saadé, said “During this unprecedented crisis, our customers have been able to rely on our agility, the expertise of our teams and the complementarity of our logistic and maritime offers, to ensure the continuity of their supply chains. Despite the uncertainty around the global economy, we anticipate an improvement during the second quarter, thanks to our operational flexibility and our discipline in terms of cost control. The current situation reinforces our conviction that it is essential to develop better balanced economic exchanges, whilst respecting the environment.”

The CMA CGM Group intends to maintain a spirit of adaptation and innovation for the shipping and logistics of tomorrow with, in particular, the development of teleworking and the acceleration of digitalization in the industry.

The good results of the first quarter demonstrate the solidity and the resilience of @cmacgm https://t.co/mscYL9Mad1

— Rodolphe Saade (@RodolpheSaade) June 5, 2020

4.6% volume decline in Q1
During the first quarter, CMA CGM saw only a limited decline in volumes of 4.6 percent. The Group managed to promptly adapt its deployed capacity to the current environment while protecting the supply chains of its customers.

CEVA Logistics
A new phase in CEVA Logistics' plan to return to profitability has been launched with actions including revitalising business development, reducing costs, and modernising industrial assets and systems. The Covid-19 crisis has confirmed the relevance of offering complementary maritime transport and logistics services, particularly air freight and warehousing.

The sale of two additional terminals covered by the agreement between CMA CGM and China Merchants Port (CMP) should be closed by this Summer.

Financial performance for Q1 2020

Group: Net profit Group share of $48 million

	Q1 2019 Group	Q1 2020 Group
			Change
Revenue, in $ billion	7.41	7.19	(3.0)%
Adjusted EBITDA(1), in $ million	779	973	24.9%
Adjusted EBITDA margin	10.5%	13.5%	+ 3.0 pts
Net income, Group share, in $ million	(43)	48	+ 91
Net cash flow from operating activities, in $ million	715	845	+ 130

(1) EBITDA before plus/(minus) disposal of fixed assets and subsidiaries

During the first quarter of 2020 CMA CGM Group revenues amounted to $7.19 billion, slightly down compared to the same period last year. This contained decrease is achieved thanks to the diverse range of industries in which the Group’s customers operate, a balanced global presence, and the complementary nature of the Group's shipping and logistics activities.

The Group's operating performance improved significantly. Adjusted EBITDA for the Group increased by 25 percent to $973 million, equating to a margin of 13.5 percent, up 3 percentage points relative to the first quarter of 2019.

Net result Group share was positive at $ 48 million (an increase of $91 million compared to the first quarter of 2019 and $ 170 million compared to the fourth quarter of 2019). The result includes a $ 185 million gain from the disposal of terminals.

Shipping: increase in Adjusted EBITDA margin to 15.1%

	Q1 2019 Group	Q1 2020 Group
			Change
Carried volumes, in million TEU(2)	5.17	4.93	(4.6)%
Revenue, in $ billion	5.71	5.52	(3.3)%
Adjusted EBITDA, in $ million	635	836	31.6%
Adjusted EBITDA margin	11.1%	15.1%	+ 4.0 pts

Shipping revenue declined by 3.3 percent compared to Q1 2019 to $5.52 billion. Volumes carried by CMA CGM decreased by 4.6 percent compared to the first quarter of 2019 due to the impact of Covid-19 and more specifically the shutdown of factories, particularly in Asia in February and March. Nevertheless, revenue per carried container improved slightly, due mainly to the application of fuel surcharges.

Adjusted EBITDA (excluding gain from sales) increased sharply by 31.6 percent over the first quarter of 2019 and reached $836 million. Adjusted EBITDA margin increased by 4 percentage points to 15.1 percent.

CEVA Logistics

	Q1 2019 Group	Q1 2020 Group
			Change
Revenue, in $ billion	1.70	1.71	0.6%
Adjusted EBITDA, in $ million	144	137	(4.9)%
Adjusted EBITDA margin	8.5%	8.0%	(0.5) pts

CEVA Logistics’ revenue increased by 0.6% to $1.71 billion, due primarily to the consolidation of CMA CGM’s logistics activities in May 2019. The impact of the health crisis was partly offset by an increase in air charters, which ensured supply chain continuity for the Group's industrial clients as well as the supply of medical products. Adjusted EBITDA decreased by 4.9 percent to $ 137 million, representing an adjusted EBITDA margin of 8 percent.

Liquidity position
In these unprecedented economic and health conditions, the Group continues to proactively strengthen its cash position. A syndicated loan of EUR 1.05 billion was signed with a consortium of three banks (HSBC, BNP Paribas, and Société Générale). The loan has an initial one-year maturity and an extension option for up to five additional years. This loan, 70% guaranteed by the French State, is part of the scheme set up by the French government in the response of the Covid-19 crisis and validated by the European Commission.