Image credit: CMA CGM

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CMA CGM reports that it recorded a "very sharp rise" in bunker expenses during the first quarter (Q1) of 2018 as the company posted a loss (after tax) of $67.2 million.

Marine fuel costs between January and March were up 17 percent year-on-year (YoY), whilst fuel oil prices rose by 19.4 percent, CMA CGM said.

Expenses for bunker fuel and consumables increased by $191.2m, or 32.0 percent, to $788.6m, up from the previous year's figure of $597.4m.

CMA CGM said the overall increase in Q1 operating expenses - by $954.8m, or 22.5 percent, to $5,192.2m - was principally due to higher bunker prices and an increase of volumes carried.

Revenue for the period grew YoY by $791.2m, or 17.1 percent, to $5,411.4m.

The operating profit indicator, EBIT, fell $144.5m, or 55.7 percent, to $115.1m.

CMA CGM's core EBIT was $88m - a YoY decline of $163.6m, or 64.9 percent. But the Marseille-headquartered firm was keen to emphasize that its core EBIT margin of +1.6 percent was "one of the best in the industry", despite "a highly deteriorated environment, affected by a very sharp rise in unit bunker costs".

Commenting on the results, Rodolphe Saade, chairman and CEO of CMA CGM Group, observed: "The shipping industry is experiencing sustained growth but was hit in the first quarter by the sharp increase in bunker prices. In this environment, CMA CGM succeeded in recording a strong increase both in volumes transported and in revenue, while maintaining a positive core EBIT margin, thus demonstrating once again the relevance of our strategy. Volumes should remain high throughout the year. In order to deal with the increase in bunker prices, which continue to rise into the second quarter, we are implementing an exceptional surcharge.

"The CMA CGM Group will continue its development strategy for its customers both in maritime transportation and in building end-to-end solutions, while pursuing its digital transformation and strengthening the expertise of its teams."