Exchange rate, integration costs temper CEVA results
CEVA Logistics, effected by the weakening U.S. dollar and British pound, reported modest second quarter revenue growth of 2.1 percent to 1.6 billion euros ($2.4 billion).
Factoring out exchange rate fluctuations since the second quarter of 2007, revenue grew 9.4 percent to 1.7 billion euros.
CEVA’s pro forma results compare financial performance from the acquisition of Eagle Global Logistics (EGL) even though CEVA did not complete the acquisition of the freight management company until the third quarter. By that definition, CEVA’s earnings before integration charges were 96 million euros, up from 93 million euros.
Earnings for contract logistics, which represented CEVA’s core business prior to the EGL acquisition, declined 3 million euros to 56 million euros.
First half revenue was up 2.5 percent to 3.1 billion euros, meaning the company will have to rely on a slightly stronger second half to achieve projected revenue of 6.5 billion euros.
CEVA said the downturn in North America and contract terminations in the prior year adversely affected results. Southern Europe and Asia Pacific was strong based on higher volumes and contract wins.
Although pro forma accounting has its critics, in this case it shows how much management has grown the company without simply counting the consolidation of EGL revenues as organic growth.
CEVA reports financial results even though it is a privately held company to meet commitments for bank loans to fund its acquisitions.
For more about CEVA’s business results and strategy on the one-year anniversary of the integration between EGL and CEVA’s contract logistics business acquired in 2006 from Dutch postal group TNT, read the September issue of American Shipper.