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Revenue stood at US$19.9 billion in the third quarter of 2022, mostly driven by the group’s maritime shipping business
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EBITDA reached $9.15 billion, representing an EBITDA margin of 46%
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CMA CGM Group continued to strengthen its balance sheet, supported by its operating performance. Net debt was cut to $78 million as of Sept. 30, 2022, down $5.3 billion from June 30, after accounting for current financial investments
France’s CMA CGM Group has logged revenues of US$19.9 billion despite a rate slide in the third quarter of 2022. Revenue was mostly driven by its maritime shipping operation, which performed strongly against a background of declining demand.
The 29.9% year-on-year revenue growth was also boosted by acquisitions in the logistics industry that contributed to the continued recovery of the group’s logistics business. But the increase was just 2.2% over the second quarter’s $19.48 billion.
Maritime shipping revenue rose 25.8% year on year to $15.7 billion as cargo volumes grew 4.1% y-o-y to 5.7 million TEUs during the quarter. Division revenue was 2% lower than in the second quarter, reflecting a steady decline in spot rates that began during that period.
The segment’s EBITDA was $8.65 billion in Q3 2023, with average revenue of $2,771 per TEU during the period. Quarterly EBITDA was down 5% from the second quarter.
Logistics revenue was $4.34 billion, while the segment’s EBITDA was $359 million. Growth was driven by maritime and air freight activities and steady recovery in contract logistics, helped by the Ingram Micro CLS, Colis Privé and GEFCO buyouts. GEFCO, whose takeover was completed in July, added $750 million to the division revenue.
In a board meeting on November 25 in Marseille, CMA CGM chairman and chief executive Rodolphe Saadé admitted the maritime shipping environment was returning to normal.
“The CMA CGM Group once again recorded strong results in the third quarter. Over the past two years, we have significantly strengthened our financial structure and developed our business through the entire supply chain. Declining demand has prompted a return to more normal international trade flows and a significant reduction in freight rates,” Saadé said.
“In this new environment, we will continue to invest to strengthen our positioning in maritime shipping and logistics, accelerate our energy transition and provide our clients with even more efficient solutions.”
Geopolitical tensions arising from the nine-month-old Russian invasion of Ukraine spurred higher inflation and dragged down consumer spending, which is increasingly shifting to services due to COVID-19. These softened freight demand, helping ease port congestions.
In this environment, CMA CGM strengthened its shipping, port, logistics and air freight capabilities, while making a significant commitment to energy transition.
The group said it was hit by geopolitical tensions, referring to the Ukraine war, specifically by a rise of $822 million in its unit bunker costs driven by higher fuel prices in Q3 2023. Weak shipping demand squeezed spot rates, particularly on the main East-West routes.
To meet energy transition challenges, the group pursued its strategy of upgrading and increasing fleet sustainability by adding two French-flagged 15,000-TEU, e-methane ready, dual-fuel container ships, the CMA CGM Galapagos and CMA CGM Greenland in the third quarter.
The group has boosted the capabilities of subsidiary CEVA Logistics by integrating expertise and skills in e-commerce, last-mile delivery and automotive logistics, adding over 12,000 workers.
CMA CGM grew its port investment portfolio by winning the tender for the privatization of the Nhava Sheva terminal in India in association with J M Baxi in July.
CMA CGM Air Cargo is continuing to expand with the recent launch of a new Paris-Hong Kong service, following delivery of its first two Boeing 777 freighters. Currently operating six aircraft, CMA CGM Air Cargo will have 12 freighters by 2026.
In September, the group announced a €1.5 billion Fund for Energies to accelerate its energy transition and achieve net zero carbon emissions by 2050 in its ocean, ground and air freight shipping and logistics business.
The group said the health crisis, inflation and energy costs, slowing consumer spending and the Ukraine war are causing economic uncertainty that signals a faster return to more normal freight rates and lower margins in the fourth quarter. However, it remains confident in its financial strength and ability to adapt to the uncertain environment.
