CEVA forecasts revenue growth but profit fall

posted on 4th February 2019 by Justin Burns
CEVA forecasts revenue growth but profit fall

CEVA Logistics has announced today preliminary results for the year ending 31 December 2018 and reported it expects revenue to grow strongly with the freight sector driving this growth.

The company expects to report revenue growth of approximately 5.2 per cent in 2018 versus the prior year, (by approximately 5.4 per cent in constant currency) to around $7,356 million of revenues versus $6,994 million in 2017. Net revenue for 2018 was $3,629 million.

CEVA said the Freight Management division’s revenue growth is estimated at a strong 7.3 per cent (7.2 per cent in constant currency) to approximately $3,507 million while revenue growth in Contract Logistics is estimated to be 3.3 per cent (3.9 per cent in constant currency ) to approximately $3,848 million.

The company anticipates adjusted EBITDA for 2018 to be approximately $260 million, compared to $280 million in the prior year. This number includes $62 million representing CEVA’s share of 50 per cent from the Chinese JV Anji CEVA.

The logistics company said communication is done in the context of the launch of a proposed offering of $825 million in aggregate principle amount of Secured Term Loan B due 2025 in a private transaction in connection with the likely change of control triggered by the Public Tender Offer published by CMA CGM SA on 28 January , 2019.

The year 2018 has been a year of structural changes for CEVA, not least of which was the company’s successful initial public offering on the Swiss Stock Exchange which was followed by a transformational refinancing that saw the company overhaul its pre-IPO structure, extend maturities and reduce interest costs.

Since the transaction, the company has made positive management and organizational adjustments and remains focused on its long-term strategy rather than on short-term performance.

CEVA said: “The Company’s underlying business has continued to perform in line with expectations in both freight management and contract logistics, albeit various one-time items have significantly impacted profitability in the third and the fourth quarters of the year.

“In the meantime, new business performance has remained promising with a strong pipeline of new customers as well as new opportunities with existing customers in both Freight Management and Contract Logistics as a positive consequence of the IPO.”

The publication of CEVA’s audited financial results for the year ending 31 December 2018 will be released on 28 February 2019.