Ever Given Owners Make New Offer To Suez Canal Authority
By Yusri Mohamed (Reuters) The owners of a giant container ship that blocked the Suez Canal in March have made a new offer in a compensation dispute with the canal...
By Antonio Vanuzzo and Tara Patel (Bloomberg) –There will be little change to global supply chains in the aftermath of the coronavirus, at least in the short term, according to the Chief Financial Officer of the world’s third-largest container company.
Marseille-based CMA CGM expects to see a 15% volume contraction in the second quarter, which will be the lowest point of the year, said Michel Sirat in a phone interview on Friday. After that, volumes “should be up in all recovery scenarios.”
“We’re relatively confident about 2020,” he said.
Sirat said that any moves to alter supply chains are likely to be slow and customers will continue to buy goods in China post-pandemic.
The coronavirus revealed weaknesses in global supply networks including a heavy reliance by the auto-parts industry on the Chinese province of Hubei, where the first outbreak occurred. Plant shutdowns there sent global carmakers scrambling for parts, creating havoc within plants around the world.
Sirat was speaking as CMA CGM released first quarter earnings that showed it swung to a net income of $48 million from a $43 million net loss a year earlier. Revenue was $7.19 billion in the first quarter, down 3% compared to the same period of last year, according to a statement. Earnings before interest, taxes, depreciation, and amortization jumped 25% to $973 million over the same period, mainly due to cost cutting measures put in place in 2019.
The company recently secured a 1.05 billion euros loan, 70% backed by the French state. The guarantee on the loan came with few conditions apart from a commitment not to issue a dividend this year and to pay suppliers on time, Sirat said.
Early in March, the shipping operator obtained a three-year extension on $535 million of credit lines maturing in 2020.
CMA CGM’s bonds due January 2025 rose 2.4 cents on the euro on Friday, to around 80 cents, according to data compiled by Bloomberg.
© 2019 Bloomberg L.P
Join the 70,304 members that receive our newsletter.
Have a news tip? Let us know.