CMA CGM Group delivers solid performance in Q2 2019 despite uncertain Global environment

MARSEILLE: The Board of Directors of the CMA CGM Group, a leading worldwide transport and logistics group, met recently under the Chairmanship of Mr Rodolphe Saadé, Chairman and Chief Executive Officer, to review the financial statements for the second quarter of 2019.
Shipping activity
The Group’s shipping business remained strong in the second quarter, with significant improvement in volumes carried and in profitability, enabling the shipping activity to post a positive net result.
Growth in carried volumes and revenue
In the second quarter, volumes transported by CMA CGM increased by 6.3 per cent compared to the second quarter of 2018 and by 6.8 per cent compared to the first quarter of 2019.
This positive trend, which is above market, is driven by the strong growth of intra-regional lines (short sea) and the United States lines, which remain particularly dynamic, said a release.
The Group thus relies on the network of intra-regional companies’ expertise that are leaders in their sectors:
* CNC, a specialist in intra-Asia
* Mercosul, a leader in cabotage and door-to-door services in Brazil
* ANL, an expert for Australia and Oceania
* Containerships, specialist in intra-Europe
Second quarter revenue was up 4.6 per cent compared to the second quarter of 2018 and reached $ 6 billion for the Group’s shipping activities.
Operating performance: Positive outcomes from the cost reduction plan
The implementation of the cost reduction plan facilitated decrease in operational expenses by $ 51 per TEU in the second quarter compared to the first quarter of 2019.
This mainly comes from initiatives to rationalise certain trades, the efforts to always improve operational efficiency, lower logistics costs, and the reduction of the Group’s ships consumption.
Adjusted EBITDA came to $ 343.6 million and the EBIT margin amounted to 5.8 per cent.
The net result of the shipping operations reached $ 2.3 million.
Logistics activity: Implementation of CEVA Logistics’ turnaround plan well underway
Following the closing of CMA CGM’s friendly public tender offer for CEVA Logistics, a new corporate governance structure was put in place with the election of Mr Rodolphe Saadé as Chairman of the Board of Directors on April 29, 2019 and the appointment of Mr Nicolas Sartini as Chief Executive Officer effective June 1.
By consolidating the company’s management teams and support functions, the new operations centre in Marseille, which opened on June 25,
is strengthening the leadership and management of the Group’s logistics activities.
CEVA Logistics’ integration is proceeding according to the strategic plan.
CMA CGM Group’s activity
Growth in revenue: Second-quarter revenue stood at $7.7 billion, a year-on-year increase of 35 per cent.The activity of the Group’s maritime division has particularly benefited from the dynamisms of its intra-regional lines and has posted a growth in volumes above global market growth.
Solid operating performance: In the second quarter of 2019, the CMA CGM Group further enhanced its operating performance, backed by the optimised use of its modern fleet of 528 vessels
(as on June 30) and the responsiveness of its market-aligned organisation.
Adjusted EBITDA came to
$ 954 million for the period, of which
$ 464 million was from the impact of applying IFRS 16 and $ 147 million from the consolidation of CEVA Logistics. Excluding these two factors, adjusted EBITDA was up by a strong 60.1 per cent year-on-year, at $ 343.6 million versus
$ 214.6 million in second quarter 2018. This performance reflected both the sustained growth in revenue and the impact of the performance improvement and cost control plan under way since the beginning of the year.
Adjusted EBITDA margin
improved significantly year-on-year to 12.4 per cent, one of the best in the industry and an improvement from Q2 2018 and the first quarter of 2019.
The implementation of IFRS 16 and the recent acquisition of CEVA Logistics lead to a net result of $ -109 million for the second quarter.
Outlook
In a context of geopolitical uncertainty, the CMA CGM Group continues to focus its efforts on operational efficiency, cost control and the rationalisation of its industrial activities and brands. In addition, the positive momentum generated by the acquisition of CEVA Logistics will gradually enable the Group to benefit from a less volatile and more diversified environment than the maritime sector.
Thanks to all the measures put in place, the Group is confident for the second half of 2019, which should be better than the first one. The CMA CGM Group will continue to improve its financial performance and adapt its commercial offering in order to provide its customers end-to-end offers, the release said.

H K Joshi to take Additional Charge of SCI - C&MD : Shipping Ministry

MUMBAI/NEW DELHI: The Ministry of Shipping has informed that consequent upon the completion of tenure of Capt. Anoop Kumar Sharma as Chairman & Managing Director, SCI on 11.09.2019.
Smt. H.K. Joshi, Director (Finance) of SCI will hold an additional charge of the post of Chairman & Managing Director (C&MD) of SCI for a further period of three months w.e.f. 12.09.2019, or until further orders, whichever is the earlier, said a company filing with Bombay Stock Exchange.
MUMBAI/NEW DELHI: The Ministry of Shipping has informed that consequent upon the completion of tenure of Capt. Anoop Kumar Sharma as Chairman & Managing Director, SCI on 11.09.2019.
Smt. H.K. Joshi, Director (Finance) of SCI will hold an additional charge of the post of Chairman & Managing Director (C&MD) of SCI for a further period of three months w.e.f. 12.09.2019, or until further orders, whichever is the earlier, said a company filing with Bombay Stock Exchange.

OOCL once again wins Singapore Environmental Achievement Award

SINGAPORE/HONG KONG: OOCL is once again a proud winner of the 2019 Singapore Environmental Achievement Award (Regional) this year, an award that recognizes persistence and dedication to achieving environmental sustainability in all aspects of the business operation.  

Over the years, OOCL has been an honored award recipient at the Singapore Environmental Achievement Award (SEAA) ceremony organized by the Singapore Environment Council (SEC).  This would be OOCL’s third time winning this award in the same category when it was bestowed to OOCL by the event’s Guest of Honor, Mr. Masagos Zulkifli, Minister for the Environment and Water Resources of Singapore, on August 27, 2019.

 

Commenting on the award win, Mr. Richard Hew, Managing Director of OOCL (Singapore) Pte. Ltd. said: “It is a real honor to win this remarkable award again. In celebrating our exceptional accomplishments and commitment to environmental excellence, this award is certainly a huge encouragement for us to continue pushing forward with our sustainability agenda into the next level and to aim higher in our green objectives.  This is certainly another important milestone reflecting OOCL’s years of culminative efforts in building an outstanding sustainability profile in the industry.”

 

In addressing emerging global environmental challenges over the years, OOCL has been taking a proactive role in implementing many environmental initiatives and projects including green vessel investment, climate scenario analysis, and greenhouse gas management.  We also applied innovative and advanced technology in our business activities, such as shipment simulation and prediction for fuel saving as well as pilot programs exploring the use of blockchain technology to help simplify the shipment documentation processes for operational efficiency, said an OOCL release.

GAC wins Best Ship Agency Award for second consecutive year

DUBAI: GAC has been named the best ship agent in the ShipTek Maritime Awards for the second year running. The awards, held in conjunction with ShipTek Maritime Conference, recognise companies that have made significant contributions to the maritime industry.

 

The award was accepted by Mikko Wieru, GAC’s Group Sales Director – East, who says: “This recognises the hard work of our people and the trust that we have meticulously built and nurtured with all our stakeholders throughout the years. We will continue to uphold that trust and serve our customers through constant upgrading and innovation.

 

“We live in a world of change. As the world’s leading provider of ship agency services, we have already embarked on a journey to keep pace with the evolution that the maritime industry is gradually but unquestionably experiencing right now.”

 

GAC is a global provider of integrated shipping, logistics and marine services. It entered the Asian market with its first office in Hong Kong in 1974. Today, it has some 100 offices in 14 countries in this region, including Singapore, Malaysia, Thailand, Indonesia, Japan, China, the Philippines and India.

Mundra Custom Broker Association elects New Office Bearers

MUNDRA: The Mundra Custom Broker Association held its Annual General Meeting (AGM) recently at Fern Residency, Mundra to elect the New Office Bearers. 

 

Mr. Dinesh Gupta was elected as the President and Mr. Sanjay Dave as Vice President. Mr. Manoj Kotak and Mr. Hemchand Yadav were elected as Secretary and Joint Secretary respectively while Mr. Pramod Soneta was elected as Treasurer, said a release from Mundra Custom Broker Association.

Govt may soon announce measures to boost exports

NEW DELHI: The Government is expected to soon announce measures for certain sectors, including gems and jewellery, 

to boost the country's subdued exports, an official said.

 

Finance and Commerce Ministries have held several round of talks on these measures, the official said.

 

As part of a proposal that is under consideration, the Government may extend the deadline for removal of tax benefits to units in the special economic zones (SEZs).

 

In the Union Budget 2016-17, it was announced that income tax benefits to new SEZ units would be available to only those entities that commence activity before March 31, 2020.

 

For the labour-intensive gems and jewellery sector, the Government is looking at cutting import duty on coloured gem stones and polished diamonds from the current 7.5 per cent.

 

There is also a consideration to increase the insurance coverage by the Export Credit Guarantee Corporation of India for export credit from the current 60 per cent to 90 per cent.

 

This would enable banks to provide more export credit at competitive rates.

 

To promote domestic manufacturing and cut imports, there is a plan for strict implementation of rules of origin criteria to check diversion of imports via free-trade agreement Countries.

 

A standard operating procedure could be implemented for faster clearance of import and export consignments. Exporters are demanding several other measures such as enhancing benefits of the Merchandise Exports from India Scheme (MEIS) for sectors like non-basmati rice and textiles, besides interest subvention for large pharmaceutical companies.

"Because exports are passing through tough times amidst global contraction in demand due to economic uncertainties, support measures for exporters would help in imparting further competitiveness to it," Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said. 

 

S C Ralhan, President of the Ludhiana-based Hand Tools Association, said refund of indirect taxes such as on oil and power, and state levies such as mandi tax would help in dealing with liquidity issue.

 

India's exports have recorded 2.25 per cent growth in July. Cumulatively during April-July this fiscal, the exports dipped by 0.37 per cent to USD 107.41 billion.

 

Single Authority Mechanism for Processing GST refunds to Exporters soon

NEW DELHI: It is welcome news that the Goods and Services Tax (GST) Council — the all-powerful federal indirect tax body — at its meeting on September 20 is expected to approve the procedure to permit a single authority for sanctioning and processing GST refunds for exporters in a quick and an efficient manner.

 

It is worth noting that as per the proposed single authority mechanism, once a refund claim is filed, whether Centre or State, the Tax Officer will check, review and sanction full tax refund (both Central GST and State GST portion), thus eliminating complications faced by the taxpayers.

 

The move may give a much-needed boost to the stressed exports sector, which contracted 0.37 per cent to USD 107.41 billion in April-July 2019-20 as the sector is facing challenges because of sluggish global demand and liquidity crunch. The GST Council, headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all States, is slated to meet in Goa and discuss the single-authority mechanism.

 

At present, the system entails a twin refund sanctioning authority, central and state tax officers. This could well change when the proposed new mechanism involving a single authority comes in place. Currently, if a taxpayer files for a refund with a Central Tax Officer, then he would clear 50 per cent of the claims, while the remaining is approved by the State Tax Officers after further scrutiny.

 

Many industry watchers say the current mechanism of two authorities settling the same refund claims makes the process complex and cause too much inconvenience for the taxpayers.

 

Mr. Bipin Sapra, Partner, EY, said, “A single authority for clearing the refunds would ease the burden of exporters to a large extent … It would also streamline and reduce litigation and bring more uniformity in the position taken.”