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CMA CGM Confirms Order for Nine Megaships based on market recovery

The number three ocean carrier CMA CGM while issuing its second quarter results has confirmed the order for nine megaships, citing signs of market recovery after a long slump. In the business update, it said: "In order to keep pace with market growth and the Group's needs, the Board of Directors of CMA CGM has approved the order for nine container ships of 22,000 twenty-foot equivalent (TEU). This order, of which the first ships will come into service from the end of 2019, will further reduce unit transport costs, particularly on the Asia-Europe routes.”

And the order has already been confirmed by Hudong-Zhonghua Shipbuilding and Shanghai Waigaoqiao Shipbuilding, which have signed LOIs for the mega-vessels at favorable prices.

The order, the firm said, would help cut transport costs particularly on Asia-Europe routes enabling to keep pace with the market growth.

Maerk Line also has said that the fundamentals were at their strongest since 2010.

CMA CGM said a recent upward trend in freight rates had led it to expect higher second-half operating profits compared with the first half, excluding significant variations in fuel costs and exchange rates.

CMA CGM reported a profit of $470 million for the second quarter, nearly double the first quarter's results and an improvement of $550 million over the same period last year. The boost came from a significant increase in shipped volumes and revenue per container – up 33 percent and 12 percent respectively. APL, which was consolidated in June 2016 in CMA CGM’s biggest ever acquisition, also remained profitable in the second quarter, with a $137 million contribution to group operating profit.

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