French container shipping major CMA CGM closed the first quarter of this year with strong earnings growth.
The company’s net income increased to $2.1 billion in Q1 2021 from $48 million seen in Q1 2020.
EBITDA came in at $3.2 billion in the first three months of 2021, representing an EBITDA margin of 29.7% — versus 13.5% in the first quarter of 2020.
What is more, first-quarter revenue stood at $10.7 billion, up 49.2% from the first quarter 2020, which was impacted by a slowdown in international trade due to lockdown measures, particularly in China.
During the quarter, the group continued to strengthen its financial structure, carrying out accelerated repayments in the amount of $1.7 billion of some of its loans, including the balance on the state-guaranteed syndicated loan contracted in May 2020. Net debt stood at $15.7 billion on March 31, 2021, down $1.2 billion from December 31, 2020.
Shipping segment enjoys increase in volumes, revenue
In the first quarter of 2021, carried volumes were up 10.7% from first quarter 2020 to 5.5 million TEUs, reflecting the quarter’s strong business activity, according to CMA CGM.
Shipping revenue stood at $8.6 billion, an increase of 57.4% driven by strong growth in unit revenue per TEU.
EBITDA for shipping was $3 billion. EBITDA margin rose 34.6%, supported by average revenue per TEU of USD 1,574 and good cost control despite the congestion issues that generated additional operating costs.
Expectations for the rest of 2021
The sustained demand for the shipping of consumer goods seen since the summer of 2020 is expected to continue in the second half of 2021, CMA CGM said.
The group added it will continue to invest in strengthening and upgrading its shipping and logistics assets while bolstering its financial structure.
“The current environment should allow the group to achieve at least the same results in the second quarter of 2021, as it did in the first,” the shipping company noted.
Investing for the future
Recently, the group made investments to strengthen and upgrade its shipping and logistics assets. It launched a dedicated airfreight division named CMA CGM Air Cargo.
Furthermore, in April 2021, CMA CGM ordered 22 new vessels to be delivered between 2023 and 2024. The newbuild fleet includes six LNG-powered 13,000 TEU units, six LNG-powered 15,000 TEU ships and ten VLSFO-powered 5,000 TEU vessels.
The group also confirmed it would be deploying six new LNG-powered 15,000 TEU vessels between China and the U.S. West Coast by the end of 2022. The first vessel will join the group’s fleet in October 2021.
“Sustained demand for the transportation of consumer goods is expected to continue throughout the year. CMA CGM will continue to develop its solutions for its customers, while maintaining its initiatives in support of the energy transition of the transport and logistics industry,” Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, concluded.
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