Still seeing red, but fundamentals improved in CEVA’s 3Q reporting

With CEVA Logistics allegedly on the hunt for a buyer, its positive third-quarter free cash flow of US$9 million, despite overall losses of $22 million, makes the Netherlands-based 3PL a far more attractive proposition than it was in Q3 of 2016, when free cash flow plunged $50 million into the red.

In yet another signal that the logistics company is turning the corner, quarterly revenue growth was up 6.1 percent, with an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $85 million. It’s worth noting that 3Q losses were under half those registered in Q3 2016, when losses reached $41 million.

For the year to date, adjusted EBITDA was $209 million, up $22 million in constant currency over the prior year.

CEVA’s CEO, Xavier Urbain, lauded “another good quarter” at the freight company. Urbain explained that the logistics company had “offset ongoing market volatility in air and ocean freight.”

CEVA said that its procurement and pricing strategy had enabled it to protect yields. “Contract logistics continues to grow and delivers improved results through focused action on contracts,” said Urbain “CEVA is on track to deliver a stronger result in 2017. The transformation we have embarked on is positioning CEVA as a strong player for the future.”

On the freight management side, EBITDA in Q3 was $26 million, down $1 million year-over-year due to “margins pressure from rates.”

CEVA maintained Q3 volume growth for its air product at 11.8 percent over the same quarter in 2016. The company said that volume planning and pricing measures had enabled it to offset market volatility in airfreight rates, notably on routes ex-Asia.

Oceanfreight saw a slower, but “organic,” growth of 2.8 percent in the third quarter.

For contract logistics, revenues were up 1.7 percent in Q3 in constant currency, which CEVA said was notable, despite the fewer trading days in the quarter and the termination of important contracts. “We had a number of new business wins notably in the consumer and retail, e-commerce and industrial sectors,” Urbain said.