Sales and profits fell at Ceva in the first quarter as a result of difficult market conditions.
“The weak economic conditions impacting the global logistics industry continued to weigh on customer sentiment during the first quarter, impacting both revenue and Adjusted EBITDA,” said chief executive Marvin O Schlanger.
“This is disappointing; however, we have now taken significant and decisive action to strengthen the company’s balance sheet through a major capital restructuring.”
Revenue in Freight Management declined by 6.8 per cent, driven by softness in Airfreight volumes as market conditions continued to be challenging, partly compensated by growth in Ocean revenues.
Revenue in the Contract Logistics declined by 5.9 per cent driven in part by the sale of Ceva’s Pallecon Container business at the start of 2013; the impact of several contracts that were terminated as part of the cost reduction program that was launched during the last quarter of 2012; and lower volumes in several key markets, notably Europe.
“We continue to focus our efforts on implementing the previously announced cost-reduction program. We remain confident that, aided by the strength of our new capital structure, we can drive revenues across the business to position Ceva for profitable growth in the future. Business development successes in the quarter met our target and will benefit future quarters. ”
The company reported Adjusted EBITDA of €31m for the three months ended 31 March 2013, down from €66m in first quarter 2012. Revenue of €1.6bn was down six per cent.
The recapitalisation programme strengthened Ceva’s balance sheet by eliminating approximately €1.3 billion of consolidated net debt. It has also reduced Ceva’s annual cash interest costs by over €130m (approx. 50 per cent) and provides access to more than €230m of new capital infusion for investment in the company’s business plan.