The CMA CGM Marco Polo.

Low freight rates continue to have an impact on the profitability of ocean cargo carriers.

The CMA CGM Group on Friday reported a net loss in earnings before interest and taxes of $66 million in the second quarter ended compared to an earnings before interest and taxes of $325 million in the year-ago period.

Revenue fell 19.5 percent to $3.3 million from $4.1 million in the second quarter of 2015.

“We are experiencing a market environment that remains difficult, with excessively low freight rates weighing on our revenue and margins,” said Rodolphe Saadé, vice chairman of CMA CGM, based in Marseille, France. “In an environment shaped by a lack of visibility, CMA CGM has the advantage of a strong liquidity position. The strategic relevance of [Neptune Orient Lines], fully financed, is reinforced. We are working to improve operating performance, notably via the launch of the Agility plan, which includes a program to reduce costs by $1 billion over the next 18 months, and in addition to the post-acquisition synergies with NOL.”

After successfully acquiring a controlling interest in NOL, CMA CGM said it has consolidated the Singapore-based company into its operations.

The acquisition has enabled CMA CGM to strengthen its competitive position and resilience in a challenging market environment.

As part of the NOL integration process, CMA CGM reviewed the portfolio of brands deployed on its various lines and concluded that only two brands should be used on each trade. APL will now serve as the core brand alongside CMA CGM on the transpacific, transatlantic and Asia-Gulf lines, all key routes for apparel imports into the U.S. ANL will be repositioned on the Asia-Oceania trade. Reorganization of the APL and CMA CGM lines will be further improved when Ocean Alliance is implemented next April.

The Ocean Alliance operating partnership consists of CMA CGM, Cosco Container Lines, Evergreen Lines and Orient Overseas Container Lines.

The company said excluding NOL’s contribution, freight carried by CMA CGM rose by 0.2 percent year-on-year in the second quarter to 3.3 million twenty-foot equivalent units, or TEUs.

Volumes rose slightly on the North-South lines, but declined on the East-West lines. Including NOL, which was consolidated as of June 14, total volume carried for the period amounted to 3.5 million TEUs.

Average revenue per TEU, excluding NOL, fell 18.8 percent year-on-year and 6 percent from the first quarter, reflecting the persistent pressure on freight rates.

As a result, consolidated revenue contracted 18.6 percent like-for-like over the period to $3.3 billion.

The company said it achieved a 10.7 percent reduction in unit costs thanks to the combined impact of lower bunker prices and disciplined expense management. As part of this process, CMA CGM rationalized its network of lines and continued to align deployed capacity with market demand.

The carrier said it has deployed Agility, a global plan to improve operating performance that combines a program to reduce costs by $1 billion over the next 18 months by reorganization of its line network with the acquisition of NOL, optimization and renegotiation of bunker costs, charters, logistics, port handling and other operating expenses, and initiatives intended to boost revenue per TEU, notably by expanding in such high value-added segments as reefer carriage.

CMA CGM has also postponed delivery of certain vessels until 2017 and reducing its capital expenditure commitment.

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