Ceva Logistics bounced back in the first quarter with a 73 per cent rise in profits driven by rising sales across the group and improved margins in the contract logistics division.
EBITDA rose from 30m euros in the first quarter of 2009 to 52m euros on sales up 14.3 per cent to 1.49bn euros. For full year 2009 the recession cut EBITDA by 28.5 per cent to 233m euros while sales were down 13.2 per cent to 5.5bn euros.
Chief financial officer Rubin McDougal said the first quarter figures reflected the impact of a full year of the cost reduction programme combined with an uplift in the level of business.
Cost rises in the freight management business offset rising volumes. In the near term rising transport rates mean margins are being compressed, said McDougal. In the medium term Ceva will be looking to pass on those rising costs to customers. “We have had some challenging discussions with customers,” he said, but he pointed out that there was a recognition among customers that rates were going up.
In contrast margins in the contract logistics business have improved significantly. “But that is against a very low base – they are still not where we would like them to be,” said McDougal. healthy growth in our retail, consumer and global automotive businesses.
Ceva has focused strongly in strict cost management and cash flow over the past year that will continue as the business plans for growth, said McDougal. In the first quarter new business wins totalled 484m euros with ongoing improvements in business share within the consumer, retail and technology sectors in line with Ceva’s strategy of focusing on winning a greater share of these businesses.
Central to Ceva’s growth plan is increasing its business with its 100 key global customers – named the Century programme. It is also focusing on trade lane development – an under-developed area for the group in the past, said McDougal.
Chief executive John Pattullo said: “This is a robust start showing considerable year-on-year improvement, with clear evidence that our continued focus on business development, cash management and structural cost reduction is continuing to deliver results.”