Ceva has reported its first quarter results and highlighted “excellent results in the automotive sector” led by two major contracts that are currently being implemented. There were also healthy figures for the contract logistics part of the business, which showed profits up almost 38% year-on-year thanks to the company’s decision to pull out of a number of underperforming contracts last year. However, revenues for freight management were down 11.5%.
The logistics provider posted adjusted earnings of $43m, an increase of 7.5%, which it said was driven by strong performance in contract logistics. However, overall revenue stood at below $1.9m for the quarter, down 8.9% year-on-year. The company put that down to continuing weakness in the air and ocean freight sectors, which it said affected overall freight management performance. Lower volumes and margin pressure out of Asia were blamed for adversely impacted performance, though there were more positive results for freight management thanks to the new business wins, according to the company’s CEO, Xavier Urbain, who took up the role in January.
“We have not…been immune to market conditions that have impacted Freight Management,” he admitted. “Despite that, I am pleased to report we had our strongest quarter in nearly two years for new business wins, showing particular strength in Freight Management as we exited the quarter. While revenue from these wins won’t be reflected until subsequent quarters, it shows positive momentum in the business.”
Ceva did not provide further detail on the new automotive business wins.
However, amongst other new contracts announced during the quarter was a customs brokerage deal with Volvo Cars in North America, implemented last month.
“Our newest Volvo relationship leverages Ceva’s deep expertise in the automotive sector and customs brokerage to bring unique value to the customer,” said Kimberly Wakeman, senior director, Business Development, Customs Brokerage and Trade Services, for Ceva. “Beyond pricing, Volvo was impressed with our compliance capabilities and our Zero Defect Start-up (ZDS) process.”
The company also expanded its business in Mexico in March this year with new facilities in Guadalajara and Monterrey, and the expansion of its existing locations in Mexico City and in Queretaro. With reference to Queretaro the company said that new automotive and aerospace customers, as well as their tier one and two suppliers, were investing heavily in the region and required the company’s support for warehousing and distribution services.