CSAV restructure starts to pay off for carrier a billion in the red
February 16, 2012
Compañía Sudamericana de Vapores (CSAV) has announced a significant reduction in its losses on its continuing operations in the fourth quarter of last year.
The Chile-based shipping line reported that in the last three months of the year its losses were US$145 million, the lowest in 2011, an improvement on the losses of more than $300 million CSAV recorded in the second and third quarters.
However, over the whole year, the company reported a loss of $1.25 billion.
CSAV explained that these results were due to “the complex scenario that the industry is facing throughout the world”.
The three main factors, it said, were: firstly, strong competition which forced tariffs down; slack demand, particularly in the second half of 2011; and the high fuel price, which increased by more than 35%.
This all caused freight tariffs to reach their lowest level in the history of the industry, said CSAV.
To face this complex scenario, improve its competitive position and prepare itself for future challenges, CSAV introduced a restructuring plan, and the Q4 result was the first sign of its success, said the line.
The plan includes a 50% reduction in containership capacity, with 33% achieved by the end of 2011.
And CSAV increased its volumes on joint operations with other lines from close to 30% in early 2011 to about 90% at present.
General Manager Shipping Containers, Oscar Hasbún, said: “We are a new company today. Through this restructuring we are better prepared to face the scenario affecting the industry and on a better footing for benefiting when market conditions improve.”
At the same time,CSAV is making a capital increase of $1.2 billion which, once completed, will see the spin-off of its terminal and tug operator subsidiary SAAM.
With the end of the first pre-emptive option period and the placement with third parties, CSAV has so far raised $788 million. It is currently carrying out the second pre-emptive offering to shareholders which will last until today.
Courtesy of IFW
