Losses continue to pile up at CEVA Logistics with a negative third quarter result of $86 million, not helped by issues in Italy.
The third quarter result compares to a loss of $22 million in the same period of 2017, with year-to-date losses coming in at $198 million, compared to $124 million for the first nine months of 2017.
Group revenue was up 1.6 per cent in the third quarter to $1.8 billion and 6.8 per cent to $5.4 billion in the first nine months of 2018, with business performing “broadly in line with management’s expectations”.
CEVA Logistics CEO, Xavier Urbain says: “CEVA continues to reduce its cost base, with a strong focus on productivity addressing underperforming activities both in FM and CL. Most of our operations continue to perform well and our new business performance is promising.
“However, in the third quarter, margins have been adversely impacted by one-time provisions taken in Contract Logistics in Italy. Looking ahead, we are confident that we will further improve our performance and meet our medium-term targets.”
Freight management revenue increased by 4.9 per cent in the third quarter to $881 million but EBITDA was down to $22 million due to increasing ground transportation costs caused by driver shortages.
Contract logistics revenue decreased 1.4 per cent to $931 million and third quarter EBITDA falling from $43 million in 2017 to $7 million this year.
Two contracts in Italy and the bankruptcy of a local Italian partner for temporary staff resulted in unplanned costs of $26 million in the third quarter and $42 million for the nine months.
CEVA says it has experienced strong momentum across all sales segments and business lines.
In air and ocean freight, CEVA won contracts with technology and automotive customers, and the contract logistics sector picked up contracts among automotive, healthcare, consumer and retail clients.