Losses continue to add up at CEVA Logistics

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Losses at CEVA Logistics increased by $45 million in 2018 to $242 million due to Italian Contract Logistics costs and IPO expenses.

Revenue for the year grew by 5.2% to $7.3 billion, and while CEVA teams continued to improve productivity, cost reduction and other margin improvement initiatives, EBITDA was negatively impacted by various events such as Contract Logistics issues in Italy and changes to accounting estimates in the fourth quarter.

EBITDA for 2018 was $198 million but CEVA estimates it would have been $54 million higher, while currency translations also affected EBITDA by a further $9 million.

In 2018, revenue at the Anji-CEVA joint venture amounted to $1.4 billion, an increase of 23.7% due to strong growth in volumes of existing contracts, new implementations and the transfer of CEVA’s Contract Logistics business in July 2017.

In CEVA’s airfreight sector, revenue was $1.5 billion with an EBITDA margin of 3.9% though tonnage decreased due to a more selective approach concerning pricing, falling 0.7% to 476,600 tonnes.

Yields in net revenue per tonne were up 6.7% to $688 due to the strength of the consumer and retail sector, and in line with the market in technology and industrial products, though automotive revenue was down.

Xavier Urbain, CEO of CEVA Logistics says: “Looking ahead, we are confident in our ability to meet our enhanced medium-term targets with the support of our strategic partner CMA CGM. The organisation is on track to accelerate its transformation and turnaround action plan in the next three years and beyond.”

CEVA’s expectations for 2021 are to exceed $9 billion of revenue and adjusted EBITDA will rise to $470-490 million.