French liner giant CMA CGM made a profitable start to the year and is expecting its operations to significantly improve.
Net profit rose to $48m for the first quarter of the year, compared with a loss of $43m in the same period last year.
The performance was helped by a $185m gain from the sale of port terminals.
Total revenues for CMA CGM Group, including its CEVA Logistics division, were fairly stable at $7.19bn.
But revenues of its liner shipping operations dipped by 3.3% to $5.52bn due to the impact of Covid-19 and the shutdown of factories in Asia.
That was reflected in a fall in volumes in the first quarter from 5.17m teu to 4.93m teu. Volumes are expected to drop by 10% drop over the first half of the year.
Optimistic outlook
Chairman and chief executive Rodolphe Saade expects that CMA CGM's operating performance should improve in the second quarter.
He pointed to liner industry's discipline in restricting capacity and cost control measures that his company has implemented.
"Despite the uncertainty around global economy, we anticipate an improvement during the second quarter, thanks to our operational flexibility and our discipline in terms of cost control," he said.
"We have set carbon neutrality by 2050 as our objective and we are ready to face future challenge.”
Rocky period
The improved results cap what has been a rocky period for CMA CGM.
Its bond slumped in March amid concerns that the Saade-family controlled liner operator would be unable to renew credit lines.
The bonds swiftly recovered their value after CMA CGM moved forward with a $2.1bn liquidity plan involving the sale of terminals and refinancing plans.
In March, CMA CGM sold eight terminals for $815m in an agreement with China Merchants Port (CMP).
The last two of ten port terminals will be hived-off later this year.
At the same time, the company has finalised $820m of vessel sale-and-lease-back and refinancing deals, which had enabled CMA CGM to repay 75% of a CEVA acquisition loan.
More recently, CMA CGM tied up a €1.05bn ($1.14bn) bank loan backed by the French government to help it weather the impacts of the coronavirus.
The loan matures in just one year, but there is an option to extend it for up to five additional ones.
