CEVA looks to resilience as revenues edge down

CEVA saw revenues fall by 3.3% year-on-year to €1,755m in the third quarter of 2011, but its EBITDA (Earnings Before Interest, Depreciation and Amortisation) remained static at €86m. It’s worth noting that EBITDA after specific items, such as restructuring costs, was €65m illustrating that CEVA is still incurring costs from its various integration and cost-cutting programmes.

The company’s Freight Management business had a mixed quarter, with big differences between its air and sea forwarding operations. Revenue for the quarter fell from €900m in Q3 2010 to €817m in the same period this year. Profits in terms of EBITDA before specific items were flat at €86m. This is as much due to factors within the business as the wider market conditions.

At CEVA’s sea forwarding business volumes grew strongly, the company attributed this to new services such as less-than-container load offerings. In contrast, it’s traditionally strong air freight business saw revenues fall as it disposed of lower margin business. Air forwarding was also hit by its exposure to the shaky electronics sector and trans-pacific traffic. Speaking to Ti, John Pattullo, CEVA’s CEO, said that although freight rates in both sectors were falling he was looking for CEVA to improve margins through greater added-value as well as introducing route management in air freight.

Contract Logistics saw revenue for the quarter rise year-on-year by 2.5% to €938m, whilst EBITDA before exceptionals was up by 4% to €50m. Growth in the division was driven particularly by inbound logistics in the automotive sector. Within the sector, markets in the developed remained buoyant, whilst emerging markets such as China slowed appreciably.

Speaking about the current state of the logistics market John Pattullo said that "there was not much evidence of a seasonal peak in air freight or ocean," but he was confident that the measures taken to both reduce costs and improve margin across CEVA would continue to deliver profitable growth.

Coincidently the recent results from CEVA’s owner, the private equity house Apollo, have raised eye-brows. These showed that the assets held by Apollo, which include CEVA, have been reduced in value on a ‚mark-to-market‘ basis. However, this comes as no surprise and it remains difficult to tell what Apollo’s long-term plan is for CEVA.

Quelle: eyefortransport
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