CEVA Holdings LLC reported results for the First Half of the year ended 30 June, 2017.
“Our Q2 is a further improvement on Q1, delivering revenue, profitability and cash flow improvements despite market headwinds. Our underlying trading was even stronger,” said Xavier Urbain, CEO of CEVA. “The Excellence Program, with a relentless focus on impeccable execution and productivity is demonstrating a strong momentum and we shall see more impact in the coming quarters. We have made much progress in terms of cost reductions and cash flow and we keep winning new business. In view of these improvements, we confirm our expectation for robust results in 2017 in EBITDA and cash flow.”
Freight Management
In Q2, Freight Management achieved revenue growth of 8.8% YoY in constant currency with Air Freight volumes up 15.6% YoY notably on the Trans-Pacific and Intra-Asia trade lanes and Ocean Freight up 3.5% YoY driven by volumes out of Asia and from Europe to Middle-East.
Although the market situation remains difficult in view of rising carrier rates, yields were maintained at relatively good levels. Productivity improvements through the implementation of our Excellence Program led to reductions in direct operating expenses per file, which mitigated the impact of the rate environment.
Freight management EBITDA in Q2 was $20 million, up $2 million in constant currency.
Contract Logistics
New business wins, particularly in Automotive, Consumer & Retail and E-Commerce, ensured continued top-line growth in Contract Logistics in Q2. Revenue was up 4.5% in constant currency.
Contract Logistics EBITDA was $39 million in Q2, up $6 million YoY in constant currency. Positive results driven from our Excellence Program together with improvements on selected contracts lead to a strengthening of margins by 50 bps.
Financial results
Second Quarter revenues were $1,721 million up 6.4% in constant currency and up 3.3% in actual currency. This is a further acceleration over the growth in previous quarters. For the first half, revenues were $3,317 million up 5.8% in constant currency and up 2.6% in actual currency.
In Q2, adjusted EBITDA came in at $70 million, up $9 million in constant currency versus the prior year. In H1, adjusted EBITDA came in at $124 million, up $11 million in constant currency versus the prior year. The improvement in profits was driven by growth and cost savings achieved from the Excellence Program which more than offset margin pressures in Air & Ocean. Continuing cost reductions will support profits in the coming quarters.
Operating cash flow in the second quarter was $72 million, an improvement of $55 million YoY reflecting better profits and the continued focus on working capital. For the first half, operating cash flow improved by $68 million YoY. CEVA has launched new initiatives to reduce working capital structurally and improve cash flows.
