CEVA profitability slumps news by Hebei Longsheng metals and minerals co., ltd.
| Ceva profitability slumps as volume growth proves expensive Ceva Logistics reported third quarter revenues that included a 6.3% increase in ocean freight handling. That expansion can be seen in U.S.-inbound volumes handled by its affiliate, Pyramid Lines, which grew by 7.1% in the three months to Oct. 31. A 14.6% surge in volumes from China was the main driver. Management are not concerned about the impact of tariffs, stating only 13% of volumes across air and ocean freight are affected by tariffs. Yet, the growth in volumes handled came at the expense of a 7.1% drop in average revenues per unit. As a consequence the group’s profitability (EBITDA margin) dropped to 1.6% in the third quarter - or 3.0% excluding the financial failure of an Italian customer - vs. 3.8% a year earlier. While the company still expects to deliver a 4% margin in the medium term, the competition for volumes shown by the lower rates and profitability would suggest the strategic tie-up with CMA-CGM will be more important than ever. |
