Third party logistics provider CEVA’s revenue dropped 6 percent, year over year, in the first quarter to 1.6 billion euros ($2.06 billion), and adjusted earnings dropped from 66 million euros to 31 million euros.
Officials attribute the lackluster revenue performance to the challenging market and said the earnings drop came primarily because of the divestiture of some of CEVA’s holdings. Air freight volume was down due to modal shift leading to a 6.8-percent revenue drop in the company’s freight management sector.
Contract logistics revenues declined by 5.9 percent on CEVA’s sale of its Pallecon Container business for 135 million euros. Contracts that had been terminated as part of the company’s cost-cutting strategy also impacted the revenue decline, as did lower volumes in a handful of markets.
“The weak economic conditions impacting the global logistics industry continued to weigh on customer sentiment during the first quarter, impacting both revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization),” CEVA’s chief executive officer, Marvin O. Schlanger, said in a statement. “This is disappointing; however, we have now taken significant and decisive action to strengthen the company’s balance sheet through a major capital restructuring.” - Jon Ross