CMA CGM Triples Quarterly Profit as Freight Rates Climb
The French shipping group CMA CGM said on Friday that its third-quarter net profit more than tripled. Disrupted sea routes in the Middle East have pushed freight rates up, and the group's books show it.
Strong demand, an uncertain outlook
CMA CGM expects container shipping demand to stay strong in the coming months, supported by rates that have climbed since the second quarter. It also warns that the outlook is uncertain because of geopolitical tensions, changing trade policies and disrupted shipping routes.
Chairman and CEO Rodolphe Saadé said that "in an uncertain geopolitical environment, the Group has delivered a strong performance in the third quarter". He pointed to growing volumes, positive terminal results and expansion in air freight and logistics. The company adds that its diversified operations, flexible network and strong balance sheet should help it through the uncertainty.
The company says global trade has stayed resilient despite geopolitical uncertainty and higher energy prices. It ties part of the demand growth to businesses rebuilding inventories, spending on AI infrastructure and data centres, and heavy buying of clean technology and electric vehicles, above all in China.
The group's results in numbers
Net income attributable to the group reached $2.32bn, against $760m a year earlier, a rise of about 205%. Revenue grew 31.1% to $18.4bn. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 61.6% to $4.78bn. The EBITDA margin improved to 25.9% from 21%.
Container shipping did the heavy lifting
The division carried 6.5 million twenty-foot equivalent units (TEUs) in the quarter, 5.5% more than a year earlier and ahead of the wider market. Average revenue per container climbed 30% to $1,891 per TEU, and shipping revenue rose 37.3% to $12.3bn.
Shipping EBITDA was $4bn, up from $2.2bn, with a margin of 32.4%. The Middle East disruption is changing how the container market works. Rates hold up, although carriers now sail longer routes, pay more to operate and see some established trade routes change.
Logistics lags behind
Not every arm did as well. Logistics revenue was $5.46bn, up 19.2%, but its EBITDA fell 14.4% to $366m. CMA CGM says freight forwarding is struggling and the automotive sector remains weak.
New ships and terminals
The company also kept investing in its fleet and ports. It took delivery of the first vessels in a new series of 24,000-TEU LNG-powered containerships: CMA CGM Notre Dame, CMA CGM Pantheon and CMA CGM Orsay. They run on the Asia-Europe FAL service and rank among the largest LNG-powered containerships in the world.
On the terminal side, CMA CGM joined a partnership involving Terminal 4 at Saudi Arabia's Port of Jeddah. It also bought a 49% stake in Morocco's Nador Container Terminal.
Source: gCaptain