CEVA sees airfreight demand improve but records another loss

CEVA Logistics saw airfreight volumes grow ahead of the market last year but revenues decreased and it recorded another loss.
The forwarder recorded a 5.5% year-on-year decline in revenues for 2016 to $6.6bn, while losses came to $159m last year compared with $195m in 2015.
Adjusted earnings before interest, tax, depreciation and amortisation (ebitda) for the year came in at $254m last year against $273m in 2015. In the fourth quarter adjusted ebitda improved by 9% on a year earlier.
However, CEVA did manage to improve airfreight volumes for the year, which increased by 6.7% against market growth estimated by Panalpina at 1-2%.
The airfreight demand improvement was also ahead of some of its European rivals: Kuehne+Nagel registered a 4.3% improvement, Panalpina increased by 10% and DHL saw air volumes slip by 1.3%.
Like its rivals, CEVA said margins came under pressure in the final quarter of the year when a demand surge pushed up prices charged by its airfreight providers.
“Despite industry-wide challenges in 2016, our full year results demonstrate that we continue to make positive headway,” said Xavier Urbain, chief executive of CEVA.
“In this context, I am very pleased with the Q4 performance where CEVA demonstrated healthy growth in all business lines and visible impact of our excellence programme which supported us to deliver robust ebitda in spite of the difficult peaks trading. The quarter also saw an impressive recovery in net working capital and strong cash flow.
“Overall, 2016 was a year of significant progress in the transformation of CEVA, during which we had some important business wins, successfully addressed legacy issues and we continued to build a much stronger platform.
“The strong improvement in results, in many of our markets, were overshadowed by weaker performance in some countries, which we continue to address.
“We enter 2017 in a stronger position and I am confident that we will have a much better performance with our excellence programme leading to further cost savings.”
Looking at its freight management division, the company said: “Our efforts throughout 2016 on tradelane management, procurement, productivity improvements and automation resulted in a 12.5% increase in ebitda in freight management in constant currency.
“The rollout of our integrated Freight Management system, OFS, in the US went relatively smoothly and is completed.
“Our OFS system has now been successfully deployed across our global footprint and we will now focus on realising the material benefits to productivity and service quality that will result from having a unified global system.”

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