CEVA outlook brightens despite lingering financial woes

Net losses at CEVA Logistics widened over 2017, but the company struck an optimistic tone in yesterday’s earnings report, noting that an increase in its cash-flow boded well for the debt-ridden company.

With gross 2017 airfreight revenue up by 19.4 percent to US$1.38 billion, and overall revenues up 5.4 percent to $7 billion, CEVA Logistics’ CEO Xavier Urbain said that the company position was “much improved.”

The forwarder remains circumspect about the prospects for an IPO. Urbain said that there remained, “ample opportunities to improve margins and deliver even better service to our clients – this is what we are working on.”

Freight management revenues rose 8.6 percent to $3.3 billion in 2017, while revenue stayed flat at $875 million. CEVA said that cost savings had offset the temporary net revenue margin pressure from rate increases.

In freight management, a strong peak season created challenges, with tight capacity in airfreight, notably on the China-U.S. routes. Air freight volumes for the year were up 11.6 percent, year-over-year, with “particularly strong Q4 performance on trans-Pacific trade lanes.”

CEVA’s yields were also solid, rising with 8.5 percent y-o-y gains in the fourth quarter, which the company credited to pricing and procurement measures.

Ocean freight also posted fourth-quarter gains, with volumes up 6.9 percent year-on-year.