Shipping group CMA CGM expects profit in 2010
* Cost-cutting plan boosts outlook
* Asia-to-Northern Europe lines return to profitability
PARIS, Nov 18 (Reuters) - CMA CGM, the world's third-largest shipping operator, is expecting a return to breakeven in December and an operating profit in 2010, the group said in a statement on Wednesday. The Marseille-based group, which was hit by a collapse in global trade last year, said its Asia-to-Northern Europe lines had returned to profitability since October, while a cost saving plan was helping the group save "tens of millions of dollars."
"The savings plan applied throughout all segments of the group, combined with increasingly firm volumes and rates, is already producing its initial effects," the statement said.
The group launched a plan in September with the aim of making some $600 million in cost savings. It was expected to show its first results in 2010 from measures including savings on fuel consumption and the closure of secondary lines.
The unlisted company lost $515 million in the first six months of 2009, and is negotiating with banks to restructure its $5.6 billion debt, its chief executive Rodolphe Saade told Les Echos newspaper in October. [ID:nLJ731494] Saade said that the French government was closely monitoring discussions between CMA CGM and its banks and did not rule out the possibility of a rights issue, which would allow the entry of a new investor into the group's capital.
"The business plan was validated (by the banks)," Nicolas Sartini, Senior Vice-President for Asia-Europe Lines told Reuters, without commenting further on the ongoing talks between the company and its 63 banks.
According to Thomson Reuters data, BNP Paribas (BNPP.PA), Societe Generale, Natixis (CNAT.PA) and Barclays (BARC.L) are among the group's main creditors. Freight operators have noticed early signs of a pick-up in traffic, after demand and prices in container shipping collapsed last year with prices on some routes dropping to zero as as exporters increased pressure on shippers. [ID:nHKG199813]
CMA CGM, whose first-half sales stood at $4.8 billion, employs a staff of 17,000 worldwide and is majority-owned by its founder, Jacques Saade. (Reporting by Michel Rose and Matthias Blamont)
