Freight Forwarders

CEVA reports improved financial results for Q2

CEVA Logistics said it has made “further progress” in the second quarter (Q2) of 2018 with increases in both revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization).

Total revenue was $1,848 million, up 7.3 per cent on Q2 last year and adjusted EBITDA was up 10 per cent to $77 million, on Q2 in 2017.

Revenue in the freight management division increased YOY by 8.1 per cent in Q2, in constant currency, and revenue growth was 5.4 per cent.

CEVA reported air volumes were softer in Q2 compared to Q1 – mainly from the earlier loss of certain customers. However, the company said implementation of important new contracts which were won during the spring tender season will drive volume growth going forward. Air cargo volumes declined YOY by 1.3 per cent in Q2 to 120,200 tonnes.

Freight management EBITDA increased by $7 million YOY to $27 million driven by improved yields in air, increased productivity and progress in reducing losses in other FM activities.

CEVA said profits were adversely impacted by increased costs in its US Ground business due to driver shortages, the impact of which is expected to reduce in coming quarters as we take mitigating actions.

For the first half year 2018, revenue in freight management increased by seven per cent YOY in constant currency and EBITDA was $42 million, up $12 million year on year.

CEVA Logistics chief executive officer, Xavier Urbain said: “CEVA continues to perform well. We now have achieved seven consecutive quarters of strong top-line growth and stronger EBITDA.

“We continue to reduce our cost base, work on productivity and address our underperforming activities. In the first half of the year, margin growth has been skewed towards Freight Management, we expect Contract Logistics to make more progress in the second half of the year as we have largely addressed the issues. We are committed to further improving our margins and are moving in the right direction.

“Whilst still early days, initial benefits from the deleveraging through the IPO are already materializing. We have increased business with some existing clients and are engaged in a number of promising discussions. In general, we have good momentum in business development. We are also making progress in developing our partnership with our new strategic shareholder CMA CGM.

“Looking ahead, we are confident in further improving our performance this year and in meeting our medium-term targets.”

CEVA said it is expecting good growth and continued margin progression in the second half of 2018 and management is confident to meet expectations, subject to no changes in market conditions.