CEVA Holdings LLC (CEVA), one of the world’s leading asset-light based supply chain management companies, reported results for the first quarter 2016 ended 31 March 2016 with an EBITDA up 15.7 per cent in constant currency against revenue drop of 5.3 per cent in face of what it said were “persistent market headwinds and rate decreases”.
Freight Management saw an EBITDA of US$10 million, reflecting a YoY increase of 57.1 per cent in constant currency with a rise in air freight volumes of 1.5 per cent and a 1.0 per cent gain in ocean freight volumes. Contract Logistics posted an EBITDA of $36 million, reflecting a YoY increase of 11.4 per cent in constant currency.
Commenting on the results Xavier Urbain, CEVA CEO said: “2016 continues the trend we started in 2015. Market headwinds continue to affect all industry players, yet despite this climate CEVA Air and Ocean volumes increased by 1.5 and 1.0 per cent respectively.
“We also maintain forward momentum through our ongoing focus on productivity and procurement improvements in both Freight Management and Contract Logistics. In parallel, we continue to strengthen our market share on the Trans-pacific trade lane,” he said.
“Our successful operating model is consistently implemented across the business and we are uniquely positioned to support global customers of all sizes to meet their business goals. A number of complex customer solutions were successfully implemented in Q1. We have also launched a transformation programme of our US operations including its Ground business.”
Freight Management gains were supported by strong trade lane activity with China as origin or destination as a major contributing factor. The business line’s net revenue margin was 30.7 per cent, an increase of 3.9 percentage points YoY, “driven predominantly by proactive and smart optimisation of our procurement efforts which ultimately benefit customer selling rates and CEVA profitability,” Urbain said.
In the face of a soft market, Air volumes increased 1.5 per cent YoY, above a very strong Q1 2015 which was due to US West Coast port congestion. A stronger field sales focus has led to a number of wins with small to medium-sized enterprises, including on trade lanes from Europe to Asia or Latin America to Europe.