CMA CGM Remains in Red, Repays NOL Acquisition Loan

French shipping major CMA CGM reported a net loss of USD 202 million in the third quarter of 2016, while its revenue for the quarter fell by 16.3 percent to USD 3.33 billion, excluding NOL contribution.

The company said that, including NOL contribution, CMA CGM’s quarterly net loss stood at USD 268 million, while its revenue for the third quarter increased by 33.9 percent to USD 4.47 billion.

Volumes carried by CMA CGM amounted to TEU 4.5 million, an increase of nearly 36%, mainly driven by the integration of NOL. Excluding NOL, volumes totalled 3.2 million TEUs in third-quarter 2016, down 2.7% year-on-year.

“In a market environment shaped by continued pressure on freight rates, average revenue per TEU, excluding NOL, was down 13.9% from third-quarter 2015 but up 3.8% on second-quarter 2016, bringing an end to a downward trend that had lasted for more than a year,” the shipping firm said.

During the quarter, a container sale and lease-back transaction generated proceeds close to USD 580 million, which were used to pay down the NOL acquisition loan. A receivables securitisation programme raised an additional USD 260 million at the end of the quarter which were later applied to the facility repayment.

“The acquisition loan has now been fully repaid ahead of maturity thanks to two sale and lease-back transactions completed on November 16 for amount of USD 880 million, which involved 11 vessels,” CMA CGM said.

The process of integrating NOL into the CMA CGM Group continued during the quarter and delivered its first commercial and operating results, with more than 20 new shipping alliances set up between APL and CMA CGM. The full reorganisation of the APL and CMA CGM lines will be completed with the deployment of the Ocean Alliance next April.

CMA CGM and its partners Cosco Container Lines, Evergreen Lines and Orient Overseas Container Lines announced the details of their Ocean Alliance operating partnership on November 3. The alliance, which will offer 40 services on East-West routes, is scheduled to start operating in April 2017 once the regulatory approvals have been granted.

During the third quarter the shipping companies “have continued to take measures to adjust the deployed capacity hence resulting in a better alignment between effective capacity and volumes carried.” Although freight rates have improved slightly, they remain at historic lows.

The company said that it will continue to focus on the integration of APL and conducting additional cost savings.

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