Categories: Business

CMA CGM Resists Shipping Headwinds

Container ship owners are used to navigating the fog and depending more or less on global trade flows, geopolitical risks and the management of their fleets. After two exceptional years, in 2021 and 2022, they have returned to the turmoil of maritime trade, even if the conditions differ from the chaos or health crisis of the 2010-2020s.

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Surprisingly, the French CMA CGM published the results of Friday February 23, 2023, a sharp decrease compared to 2022. Profit fell to 3.6 billion dollars (3.3 billion euros), after net profit was close to zero in the fourth quarter. A far cry from the 24.9 billion announced a year earlier, which made it the most profitable French company ahead of Total Energy. The fourth quarter was also in the red. If transported volumes remained constant, at 21.8 million twenty-foot equivalent “boxes” (TEU), turnover fell to $47 billion (−36.9%).

Group CEO Rodolphe Saade believes that “Performance remains solid”, two years after recovery from Covid-19, despite normalization of the sector. In the history of container transport, such profits remain significant, especially since European shipowners pay only 2% tax on profits (excluding logistics and port activities). Two trends weighed on demand for container ships: significant inventory reductions, particularly in the United States, and a rebalancing of consumption in favor of services and the loss of manufactured goods.

“Standardization Reference”

Despite this “Standardization reference”group “Will continue to invest in its transformation”, suggests Mr. Saade. For several years, it has reinvested in logistics, currently finalizing the acquisition of Bolloré Logistics, to enter the top 5 worldwide in the transport and logistics sector. CMA CGM has also acquired port terminals (Los Angeles, New York, etc.) and will spend $15 billion during the period 2020-2027 for 120 ships powered by liquefied natural gas or methanol, which emits less CO.2 and fine particles.

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The Marseille giant’s results, the world’s third-largest shipowner, are close to Danish AP Moller-Maersk ($3.8 billion), second in the sector behind the Aponte family’s Italian-Swiss MSC, which does not publish. Results The Copenhagen group is more forthcoming than its two competitors on the current situation. And its CEO, Vincent Clarke, expects difficulties in 2024, especially linked to the entry into service of new ships.

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