CEVA Logistics shrugs off rising carrier rates with net earnings increase

Despite challenges presented by higher year-over-year ocean- and airfreight rates, supply chain management company CEVA Logistics posted stronger y-o-y net earnings figures for the first half and second quarter of 2017, supported by productivity improvements in freight management and “new business wins” in the contract logistics segment.

First-half adjusted earnings before interest, taxes, depreciation and amortizations (EBITDA) rose 5 percent, y-o-y, to US$124 million, while EBITDA for the second quarter rose 6 percent, y-o-y, to $70 million.

CEVA reported stable yields in freight management, with airfreight volumes up 15.6 percent, y-o-y, in Q2, especially in the trans-Pacific and intra-Asia trade routes; ocean freight volume was up 3.5 percent during the same period. New contracts in automotive, consumer and retail, and e-commerce sectors supported a 4.5 percent revenue growth in the contract logistics segment.

Still, market challenges contributed to a companywide net loss of $45 million for the second quarter and $102 million for the first half, down from losses of $35 million and $32 million respectively during the same periods in 2016. CEO Xavier Urbain expressed optimism that improvements in productivity and new business will continue to improve cash flow and put CEVA Logistics on track for strong results in 2017.

“Our Q2 is a further improvement on Q1, delivering revenue, profitability and cash flow improvements despite market headwinds,” Urbain said. “We have made much progress in terms of cost reductions and cash flow and we keep winning new business.”

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