CEVA has reported results for the third quarter of the year ended 30 September, 2017.

“I am pleased to announce another good quarter for CEVA" says Xavier Urbain, CEO of CEVA. “We have been able to offset ongoing market volatility in air and ocean freight. Our procurement and pricing strategy has enabled us to protect yields sequentially. Contract logistics continues to grow and delivers improved results through focused action on contracts. CEVA is on track to deliver a stronger result in 2017. The transformation we have embarked on is positioning CEVA as a strong player for the future."

Freight Management

In Q3, Freight Management maintained volume growth for its air product at 11.8% versus prior year.  Market volatility in airfreight rates continues, notably on routes ex-Asia.  Volume planning and pricing measures have enabled us to mitigate that pressure to a large extent.

Ocean freight saw an organic growth of 2.8% in the quarter.

Our excellence program delivered cost and quality improvements, supporting stable yields.

Freight management EBITDA in Q3 was $26 million, down $1 million year-over-year as a result of margins pressure from rates.

Contract Logistics

Revenues are up 1.7% in Q3 in constant currency in spite of less trading days in the quarter and the termination of certain contracts. We had a number of new business wins notably in the consumer & retail,  e-commerce and industrial sectors.

Contract Logistics EBITDA was $43 million in Q3, up $5 million YoY in constant currency, a strengthening of the margin by 50 bps. This positive result is driven by the focus on productivity improvement on key contracts through the Excellence Program and the portfolio review.

Financial results

Third Quarter revenues were $1,782 million up 5.4% in constant currency and up 6.1% in actual currency. For the nine months, revenues were $5,099 million up 5.6% in constant currency and up 3.8% in actual currency.

In Q3, adjusted EBITDA came in at $85 million, up $11 million in constant currency versus the prior year. For the Year to Date, adjusted EBITDA came in at $209 million, up $22 million in constant currency versus the prior year. Cost reductions will support profits in the coming quarters.

Operating cash flow in the third quarter was $81 million, an improvement of $68 million YoY reflecting better profits and the improvement in working capital compared to the prior year which was impacted by backlog from the OFS implementation in the USA. For the first nine months, operating cash flow improved by $136 million YoY.