CSAV back in black with US$37 million third quarter operating profit

CHILE's flag carrier CSAV restored its profitability by posting an operating profit of US$37.3 million in the third quarter after suffering from losses in previous eight quarters, reversing a huge operating loss of $354.9 million a year earlier.

But CSAV is still sailing in the red after counting the results of first nine months, though losses have been reduced 74.2 per cent year on year. As the carrier took a bold move to rationalise its services and capacity last year, revenue has dropped 30.5 per cent.

"We are satisfied with the work done. We have been able to carry out a deep change in our business model and today our efforts are being reflected in our results following a long period of losses," said CSAV chief executive Oscar Hasbun.

He said this quarterly result reflected the successful effect on the carrier's restructuring with "a sustainable long-term business model".

After suffering from huge losses, CSAV has enlarged the joint operations to the present level of 95 per cent of its network capacity from 30 per cent in the past. It has also increased in its own fleet, from eight per cent at the end of 2010 to 37 per cent in the second half of the year.

"The market and freight rates are still unstable, as well as the oil price, so the company is continuing to work to improve its operating efficiency through several initiatives as part of the work being done with the consultants McKinsey," he said.

CSAV posts first half loss of US$525 million, looks to partnership

CHILEAN carrier CSAV recently announced a net loss of US$525 million in the first half of 2011, having made continuous losses for three years in a row since 2008, totalling $1.05 billion.

Searching for way back to profitability, the carrier said it was looking for a "strategic" shipping partner, but provided no details. Additionally, it has curtailed 20 per cent of its capacity in the past six months to cut costs.

CSAV's operating loss topped $567 million, showing a sharp downturn from $51 million profit recorded in the first half last year. It recorded an operating loss of $369 million in the second quarter, the worst performance in the company's history.

Facing the need for financing, CSAV said it plans to raise its equity by $1.2 billion, reported Paris-based analyst Alphaliner, adding that the carrier bears some financial burden of $1 billion for buying seven 8,000-TEU and two 6,600-TEU vessels between 2010 and 2012.

In the past two months, CSAV announced joint services with MSC and CMA CGM, which are expected to help reduce the losses in future, but for now the carrier forecasts full-year serious losses.

As part of re-structuring, CSAV is keen to separate its shipping business from the vessels and cargo maritime services business run by its subsidiary SAAM. It attempted to let SAAM go public earlier this year with up to 49 per cent initial public offering, but no further progress has been made since.

source: Shippingazette.com / picture: google.com