MARSEILLE: May 25, 2016.  The competition bureau of the Chinese Ministry of Commerce (MOFCOM) has cleared CMA CGM's proposed acquisition of Neptune Orient Lines following an earlier approval by the European Commission.

Last week the ocean carrier reported a net loss of US$100 million on revenue of US$3.4 billion for the first quarter of 2016 compared a net profit of US$406 million on revenue of US$4.0 billion in the same period last year.

TEU volume rose 2.9 percent year-on-year to reach 3.2 million as fleet capacity increased 6.7 percent to 1.8 billion, while average revenue per TEU fell 17.6 percent during the period.

The company said the increase in capacity was due to growth in Transatlantic and Transpacific trades to and from the U.S., while continued pressure on rates reflected “the ongoing imbalance between supply and demand” worldwide. The carrier has noted a “slight improvement” on the Asia-Europe and Asia-Mediterranean lines but added the environment remains fragile.

Rodolphe Saadé, CMA CGM vice chairman commented: “In a very difficult environment, we have in the first quarter recorded an increase in volumes above the market average, while maintaining a positive core EBIT margin.”

Saadé said the company plans to cut costs by US$1 billion in the next 18 months.

CMA CGM is continuing with its proposed acquisition of NOL following clearances from the European Commission and India, as well as developing its ‘Ocean’ operating alliance with Cosco, Evergreen and OOCL.