CEVA Logistics sinks further into red in Q3

CEVA Logistics’ most recent financial results show that the company’s struggle to break out of a pattern of net losses has continued in its third quarter of 2018. Its year-over-year operating income recessed 250 percent from a positive US$22 million to a $14 million loss over the three-month period and its profit/loss figure, which includes additional expenses, came to $86 million in losses, a 74 percent decline from the $22 million loss reported in Q3 2017.

While the company’s Q2 figures were still largely in the red, CEVA showed some potential of breaking even later in the year. But zooming out to compare the first three quarters of this year to the same period last year shows a 37 percent decline in profit/loss to minus-$198 million and a 98 percent decline in operating income to about $1 million, meaning Q3 was a particularly bad quarter for the company, compared to earlier quarters this year.

CEVA addressed the marginal decreases during the three-month period in a statement: “Despite many productivity improvements across many contracts and geographies, and continued productivity gains on focus contracts, two contracts in Italy and the bankruptcy of a local Italian partner have resulted in additional unplanned costs of $26 million in the third quarter and $42 million for the first nine months.”

Despite discouraging bottom lines, the company was still successful in growing its business, made evident by an overall revenue increase of 4.7 percent. This contributed to revenue growth in CEVA’s freight and contract logistics segments’ revenues, which increased by 6.8 percent and 2.8 percent, respectively, in constant currency. But looking specifically at the company’s airfreight business (shown in graph), which falls within its freight segment, volumes were flat year-over-year.

CEVA mentioned an impending “significant strengthening” of its relationship with CMA CGM, the French container and shipping company in “coming months,” the details of which are not yet clear.

Last month, it seemed that CEVA’s ownership might change hands when the Denmark-based logistics company DSV made two unsolicited, non-binding acquisition bids to CEVA Logistics AG, the first of which CEVA’s board of directors rejected, and the second of which it did not have the chance to respond to before the Danish company rescinded the offer, “based on the unwillingness of the board of directors of CEVA to engage directly with DSV at the price per share offered.”