CMA CGM’s third-quarter performance is strong
On November 25th, CMA CGM released its report for the third quarter of 2022. In the third quarter of this year, CMA CGM achieved total revenue of $19.91 billion, a year-on-year increase of 29.9% and a quarter-on-quarter increase of 2.2%; EBITDA of $9.15 billion, a year-on-year increase of 28.9% and a quarter-on-quarter decrease of 4.6%; the EBITDA rate was 46%; net profit It reached $7.04 billion, a year-on-year increase of 25.1%, and a month-on-month decrease of 7.4%. Net debt decreased by $5.3 billion to $78 million from June 30, 2022.
In other words, CMA CGM achieved revenue of $57.61 billion, EBITA of $27.62 billion, and net profit of $21.84 billion in the first three quarters of this year. Affected by geopolitical tensions, especially the increase in unit fuel costs due to rising energy prices. Higher energy prices contributed to an $822 million year-over-year increase in fuel costs in the third quarter of this year. The slowdown in shipping demand has pushed down spot freight rates, especially on key east-west trades. From the perspective of the logistics sector, the growth was mainly driven by the sea freight and air freight business, and the contract logistics business continued to recover. The acquisitions of Ingram Micro CLS, Colis Privé, and GEFCO also boosted revenue and EBITDA growth in the logistics division.
The financial report shows that the logistics business achieved revenue of $4.34 billion, a year-on-year increase of 51.3% and a month-on-month increase of 14.9%; EBITDA reached $359 million, a year-on-year increase of 33.1% and a month-on-month increase of 5.6%; the EBITDA rate reached 8.3%. Rodolphe Saadé, CEO of the CMA CGM Group, commented on the performance that the CMA CGM Group once again achieved strong results in the third quarter. Over the past two years, we have significantly strengthened our financial structure and grown our business by investing in our supply chain. The fall in demand has led to a return to normal volumes and significantly lower freight rates. In this new environment, CMA CGM will continue to invest in strengthening its market position in maritime transport and logistics, accelerating the energy transition, and providing our customers with more efficient solutions.
Strengthen the group’s strategic investment
The third quarter of this year was impacted by ongoing geopolitical conflicts, which led to higher inflation and weighed on consumer spending, which is increasingly shifting toward services demand in the wake of Covid-19. These factors have dampened demand for cargo, but have also helped ease some port congestion. In this environment, CMA CGM has implemented a strategy to strengthen its shipping, ports, logistics, and air freight capabilities, while making a major commitment to the energy transition.
Freight transport: Investing in fleet upgrades and improving fleet sustainability
In order to meet the challenges of the energy transition, CMA CGM is implementing its strategy of upgrading and improving the sustainability of its fleet. In the third quarter, it ordered two new 15,000TEU ethane dual-fuel container ships, respectively flying the French flag. “CMA CGG Galapagos” and “CMA CGL Greenland”.
CMA CGM is committed to achieving net zero emissions by 2050 and intends to accelerate the energy transition in shipping and logistics by strengthening its energy mix. At the same time, CMA CGM consolidated its position as a global logistics provider and expanded its automotive logistics services. CMA CGM’s acquisition of nearly 100% of the shares of GEFCO, the European automotive logistics leader, was approved by the European competition authority in July this year. As the European leader in contract logistics, GEFCO specializes in finished vehicle transport and other automotive logistics, playing a key role in maintaining the integrity of production lines throughout the European automotive industry. Thanks to several acquisitions completed since the beginning of the year, CMA CGM has strengthened the capabilities of its subsidiary CEVA Logistics by integrating expertise and skills in e-commerce, last-mile delivery, and automotive logistics, adding 12,000 Multiple employees.
CMA CGM boosts its port operator status
The CMA CGM Group owns equity interests in 50 port terminals in 33 countries. Its port operations are strategically designed to support the growth of its shipping lines and improve the quality of its customer service. In the third quarter of 2022, CMA CGM, together with its partner J M Baxi, won the tender for the privatization of India’s Nhava Sheva terminal, thereby strengthening its portfolio. The concession agreement, signed on July 29, will support commercial development on India’s west coast while upgrading and expanding the 700-meter-long container terminal berth at Jawaharlal Nehru Port to increase throughput and service quality. This investment strengthens CMA CGM’s position in fast-growing regional and global markets.
CMA CGM Cargo continues to expand
The air cargo arm of the CMA CGM Group recently launched a new Paris-Hong Kong service and continues to expand after taking delivery of its first two Boeing 777 freighters. CMA CGM’s cargo fleet currently consists of six aircraft and will consist of 12 freighters by 2026.
Creation of a €1.5 billion energy fund to accelerate the energy transition in shipping and logistics
In September, CMA CGM Group announced the establishment of a special energy fund, planning to invest US$1.5 billion within five years to accelerate the energy transition and achieve the goal of net zero carbon emissions by 2050. The fund works to accelerate the decarbonization of the Group’s global sea, land, and air freight activities and logistics operations. In particular, the Energy Fund will support the development and industrial-scale production of renewable energy sources (biofuels, biomethane, e-ethane, green methanol, etc.), while accelerating the decarbonization of port terminals, warehouses, and onshore fleets.
€200 million dedicated to decarbonizing French shipping
As part of the Energy Fund, a budget of 200 million euros will be committed in early 2023 by calling for projects that can support the decarbonization of the entire French shipping and port sector. With this initiative, CMA CGM plans to promote the emergence of innovation-oriented projects to support the emergence of a carbon-free French shipping industry. Looking ahead, CMA CGM said continued geopolitical conflicts have led to higher inflation and weighed on consumer spending, especially in Europe. At the same time, after the epidemic, consumer spending has increasingly shifted to service needs. These factors have dampened demand for freight, and CMA CGM expects a faster return to more normal freight rates in the fourth quarter and lower margins. Based on this, CMA CGM is closely monitoring the development of the geopolitical situation and its potential impact on the economic outlook, but remains confident in its financial strength and ability to adapt to an uncertain environment.
