Encouraging Outlook for 2012 in a Persistently Volatile Market

Marseilles, March 7th, 2011 - The Board of Directors of France-based CMA CGM, the world’s third largest container shipping group, met under the chairmanship of Jacques R. Saadé to review the financial statements for the year ended 31 December 2011.

The Group reported revenue of US$14.87 billion for the year, a 4% increase on 2010. Volumes carried increased by 11%, outperforming the market’s 6.5% increase and reaching a record high of 10,016,000 teus.

The market environment was challenging, shaped by overcapacity and the steep run-up in oil prices, with per-tonne bunker prices soaring 34% over the year. CMA CGM nevertheless enjoyed a satisfactory operating performance, thanks to its extremely efficient fleet, global network and sustained cost discipline.

EBITDA stood at US$711 million, down from 2010, year in which the entire container shipping industry reported record profits.

The Group ended the year with a consolidated net loss of US$30 million.

CMA CGM continued to assertively dispose of non-strategic assets during the year. It also strengthened its balance sheet by issuing US$500 million in ORA equity notes to the Yildirim Group and raising an aggregate US$945 million through two bond issues denominated in dollars and euros.
 
Outlook for 2012

Although the beginning of the year was difficult for the entire industry, freight rates are now trending upwards, especially outbound Asia. Several shippers, including CMA CGM, have announced and are introducing significant rate increases as from the 1st of March 2012.

In addition, to enhance its operating performance, the Group plans to:

-  Continue implementing operating partnerships with MSC on the Asia/North Europe and South America lines and with Maersk on the Asia/Mediterranean, Adriatic and Black Sea trades.
- Deploy increasingly efficient, modern and cost-effective vessels on every trade.
- Develop more innovative, high-quality information technology services thanks to the new strategic partnership with IBM.

CMA CGM is pursuing its cost reduction plan, which is expected to deliver US$400 million in savings this year. In the same way, the decline in charter rates will reduce operating costs by US$80 million in 2012.

Thanks to all these measures, the Group expects to report a profit in 2012, in a market that is difficult to predict given the scheduled arrival of a large number of new vessels and further increases in bunker costs.

In that context, on 6 March, CMA CGM met with its banks to discuss the market volatile situation and its consequences.

The Group remains confident in the future of the industry and will continue to strengthen its positions, particularly in Russia, India, Latin America and Africa, as well as in the reefer segment.

Commenting on the results, Rodolphe Saadé, CMA CGM Group Executive Officer, said: “Once again this year, CMA CGM has demonstrated its strong resilience at a time of intense turmoil in our industry. Our operating and financial performances were among the best in the industry. We set up strategic operating partnerships with MSC and with Maersk to address market challenges and maintained our commitment to controlling costs. We expect the market to improve in 2012, particularly in the second half. With its modern, efficient fleet and its skilled, experienced teams, CMA CGM is well positioned to capture all of the benefits.”

Financial Highlights as of 31 December 2011

Revenue in US$ billion 14.9
EBITDA in US$ million 711
Net result in US$ million (30)
Volumes carried, in teu* million 10.016
Shipping fleet
of which owned vessels
394
91
Fleet capacity, in TEU million 1.345

 

 

 

 


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