The world’s third largest container line, CMA CGM, reported a 66.7% jump in net profit to $156m in the second quarter of 2015.
The result compared to a $94m net profit in the same period a year earlier. The improved profitability came despite a 2.1% fall in revenues to $4.11bn in Q2 2015, compared to $4.2bn in the same period a year earlier.
Commenting on the result CMA CGM said: “In the second quarter, CMA CGM demonstrated the strength of its business model by significantly outperforming the market, despite a sharp fall in freight rates and industry overcapacity.”
The container line increased volumes in Q2 by 6.2% year-on-year to 3.3m teu. While average revenue per teu dropped 7.8% year-on-year, lower fuel costs also helped the line to 10.9% reduction in unit cost.
In common with other companies in the sector CMA CGM sees little prospect of an improvement in freight rates in the third quarter. “During the third quarter, freight rates are expected to remain particularly volatile for Asia-Europe and Asia-Mediterranean lines. As a result, CMA CGM will continue to adjust its capacities.”
However, the company also thinks it has the edge in terms of competitive advantage: “CMA CGM expects to continue to outperform the market and deliver profitability above the industry average thanks to the core strengths of its business model: a high quality fleet, broadly diverse lines, responsiveness and commercial dynamism.”