PARIS, May 20 (Reuters) – France’s CMA CGM, the world’s third-largest container transport agency, reported a first-quarter web loss on Friday and focused $1 billion in price cuts to maintain working margins constructive through the present market downturn.

Weak freight charges up to now 12 months have left many traces working at a loss.

The Marseille-based firm is within the strategy of buying Singapore’s Neptune Orient Lines (NOL) for $2.4 billion in its biggest-ever deal, and final month introduced a worldwide vessel-sharing alliance with three Asian traces.

CMA CGM posted a web lack of $100 million for the primary quarter, in contrast with a $406 million web revenue in the identical interval of final 12 months, it mentioned in a press release.

Core working revenue fell to $3 million, additionally from $406 million a 12 months in the past, whereas gross sales declined by 15.3 % to $3.4 billion.

Increased volumes, which rose 2.9 %, and an unspecified fall in unit prices partly offset weak freight charges to deliver the working margin to 0.1 %.

“In a very difficult environment, we have in the first quarter recorded an increase in volumes above the market average, while maintaining a positive core EBIT margin,” Vice-chairman Rodolphe Saade mentioned within the assertion.

“We will continue our strict financial discipline, including the implementation of a significant cost reduction plan.”

The group mentioned it plans to launch later this 12 months an 18-month programme to decrease its prices by $1 billion. A spokesman declined to present particulars on the measures concerned.

CMA CGM’s group prices had been $14.4 billion final 12 months.

Earlier this month market chief Maersk Line introduced a return to revenue within the first quarter, helped by price cuts.

Container transport has been weakened by oversupply of vessels ordered throughout a earlier growth, together with faltering international financial progress.

CMA CGM mentioned freight charges on Asia-Europe and Asia-Mediterranean routes had improved barely because the begin of May 2016 however the market “remains fragile”.

Volumes progress within the first quarter was primarily resulting from routes to and from the United States, which outweighed a decline in volumes between Asia and Europe, the corporate mentioned. (Reporting by Gus Trompiz; Editing by Bate Felix/Ruth Pitchford)

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