The liner carrier CMA CGM said Thursday that it sustained $224 million in operating losses in the third quarter, continuing a trend of huge losses for container lines between July and September.
The line, which announced a major alliance deal with Mediterranean Shipping Co. on Thursday, had revenue of $3.9 billion in the third quarter, 2.8 percent higher than in the same quarter of 2010. Year-to-date, CMA CGM has turned a net profit of $13 million on revenue of $11.1 billion, an increase of 5.2 percent year-on-year.
Volume in the third quarter was 2.6 million TEUs, up 10 percent over the third quarter of 2010. For the year, volume was 7.4 million TEUs, 9.4 percent higher than the corresponding period in 2010.
“The global economic environment remains challenging and demand is still being impacted by overcapacity,” the line said in a statement. “Nevertheless, CMA CGM Group believes that the situation will change in the coming months and expects to see an upturn in demand in 2012, led by the persistent growth in the container shipping industry, which is steadily gaining market share from other transport modes, and the market-driven moves to rationalise current shipping lines.”
CMA has started a plan to reduce annual costs by $400 million, which involves rationalising services and capacity, renegotiating vessel charter rates, and improving vessel fuel efficiency.
“The market’s current overcapacity, combined with slower demand, is impacting our financial performance,” said Michel Sirat, CMA CGM’s chief financial officer. “Our size and ultra-modern fleet are enabling us to successfully weather this situation and we have undertaken immediate, solid, effective measures to adjust to conditions ahead of the expected market turnaround in 2012.”
CMA CGM is not publicly traded and so is not required to report its financial statements, though it has released annual earnings statements. In recent years, the line has begun issuing quarterly financial updates.
CMA CGM loses big in 3Q
