CMA CGM Posts $270 Million Loss in Third Quarter
CMA CGM, the world's third-largest container shipping company, posted on Friday another net loss in the third quarter as freight rates remained weak and it integrated Singapore-based NOL, its biggest-ever acquisition.
The sector was showing the "first signs of stabilisation" as operators adjusted capacity but freight rates remained historically low, CMA CGM said on Friday.
The French-based company's net loss including NOL was $268 million, compared with a $51 million net profit in the third quarter of 2015. Excluding NOL, the net loss was $202 million.
The shipping industry has been struggling with a prolonged downturn linked to vessel overcapacity and faltering economic growth, which contributed earlier this year to the collapse of South Korea's Hanjin Shipping Co Ltd.
Denmark's A.P. Moller-Maersk reported earlier this month a third-quarter net loss for Maersk Line, the global leader in container shipping.
The tough environment has prompted consolidation moves in the industry, including CMA CGM's $2.4 billion takeover of NOL that has given it market leadership on trans-Pacific routes.
CMA CGM, which is privately held by the Saade family, said it had completed on Friday the reimbursement of a $1.6 billion loan taken out to finance the NOL deal, after raising $880 million in a sale-and-leaseback transaction covering 11 ships.
The group had previously paid back half of the loan, supported by a sale-and-leaseback deal for containers and a securitisation programme covering customer debts.
Group sales were boosted by the integration of NOL as of June 14, with total third-quarter sales rising 33.9 percent from a year ago to $4.47 billion.
Shipped volumes were up 35.8 percent including NOL, but fell 2.7 percent on a like-for-like basis, with CMA CGM saying it had focused volumes on more profitable areas.