CEVA Logistics has reported that its revenue in the first quarter (Q1) of this year was up 5.4 per cent and that air freight played a major role in the increase.
The logistics firm detailed its financial figures for the quarter that ended on 31 March and said overall revenue reached $1.79 billion, adjusted EBITDA was $66 million up $12 million, or 22 per cent year-on-year (YOY). Reported EBITDA was $53 million up $8 million YOY.
Revenue in Freight Management was $803 million in Q1 of 2018, an increase of 14.4 per cent YOY or 8.7 per cent in constant currency on the basis of good volumes, new business wins and higher freight rates, notably in air.
Revenue in air freight was strong with an increase of 21.8 per cent YOY, but volume growth at 1.6 per cent was lower than in prior quarters which CEVA said reflected the delayed onboarding of new business wins and certain contract losses. Yields (net tevenue per ton), however, were up 17.1 per cent YOY driven by better procurement and active margin management.
CEVA Logistics chief executive officer, Xavier Urbain said: “I am pleased to report another good quarterly result. Q1 2018 has shown once more that CEVA is delivering on its transformation with continued growth and consistent EBITDA improvement. We’ve seen good momentum and had several new business wins. We have further improved productivity and reduced cost.”
Following the successful IPO on the Swiss Exchange, CEVA said it has initiated the process of repaying debt with the net proceeds from the IPO.
Urbain added: “The successful IPO opens a new chapter for CEVA. The deleveraged balance sheet and the strategic investment by CMA CGM will create important growth opportunities. I am confident that we can further improve margins and deliver significant earnings growth in the years to come – our target is to improve Adjusted EBITDA by $100 million in the medium-term.”
As for the future, CEVA expects continued good volume and revenue growth in view of the sales momentum and recent business wins and the further productivity, cost savings and pricing initiatives pursued in Freight Management, Contract Logistics and SG&A are expected to support an increase in EBITDA margin in the year.