CEVA's strong finish to 2017

23 / 02 / 2018

CEVA Holdings reported results for the full year and fourth quarter of the year ended 31 December, 2017.

The parent company of CEVA Logistics said that the fourth quarter 2017 peak season was once again "challenging with tight capacity in airfreight, notably on the China-US routes". 

Airfreight volumes in 2017 were up 11.6% year on year with a "particularly strong" Q4 performance on transpacific trade lanes". CEVA also maintained "solid" yields, up 8.5% versus prior year in Q4 due to pricing and procurement measures.

The full year results come shortly after US financial press reports suggesting that Ceva Logistics may go public in April with an initial public offering of “roughly $1.5bn” 

Ceva is owned by private equity investor Apollo Global Management, which tried to take the logistics firm public in 2012, but failed in the face of poor financial performance and, according to the Post, saw its equity “wiped out” as a result of measures to clear Ceva’s debts.

Xavier Urbain, chief executive of CEVA, said of the 2017 results: “I am pleased to report a strong finish to a good year. Our Excellence Program has delivered important cost savings and has supported much better profits despite market headwinds.

"At the same time, revenue growth across Contract Logistics and Freight Management has been very good. With stronger revenue, profits and cash flow, we have delivered on all our objectives.”

He continued: “CEVA's competitive position has much improved as evidenced by the important business wins we have had in recent months. Through the transformation we have initiated in 2014, CEVA is a much stronger company now. However, we still have ample opportunities to improve margins and deliver even better service to our clients – this is what we are working on.”

“I am confident that we can keep the momentum and can continue to improve our results going forward”.

Overall, freight management revenue from sea and airfreight was $3.3bn in 2017, up 8.6% in constant currency, whilst net revenue was $875m, stable versus last year. Cost savings allowed us to offset the temporary net revenue margin pressure from rate increases. As such, EBITDA was $76m, up $13m in constant currency.

Total CEVA group revenue in Q4,including contract logistics, was $1.9bn, up 5.7% in constant currency vs prior year, the fifth consecutive quarter of strong growth. Full year revenue was $6.9bn, up 5.4% in constant currency.

Adjusted EBITDA was $71m in Q4 and $280m for the full year, up $31m in constant currency.

Added the company's result statement: "The underlying profitability improvement was even stronger but partially offset by the temporary margin pressure from market conditions in freight management and the increase in variable compensation related to the good performance in the year."