CMA CGM reinvests nearly 90% of 2022 record profit

The French container line owner reported a net profit of $24.9bn for 2022 up from $17.9bn for the previous year, while revenues were up 33.1% at $74.5bn. However, reflecting a sharp drop in container freight rates net profit for Q2 2022 declined by 54.7% year-on-year to fall to $3.0bn, compared to $6.7bn a year earlier.

CMA CGM described 2022 as year of contrasting halves with the first half characterised by high consumer demand and shipping capacity constrained by port congestion and supply chain issues. By contrast the second half of the year saw a demand shock that worsened in the fourth quarter with US inventory destocking, the impact of inflation on consumer spending, and an energy crisis in Europe. The result was the company saw a 7.2% decline in container volumes on east-west trade routes in Q4 of last year.

Commenting on the results Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, said “Our group achieved exceptional, historic results in 2022 that have enabled us to invest significantly in operations across our business, step up our energy transition and share the created value with our employees.

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The company said that it had reinvested close to 90% of net profit for 2022 in assets and capabilities, in addition to strengthening its balance sheet.

Investments included 100% ownership of Fenix Marine Services terminal in Los Angeles/Long Beach, and late last year it announced the acquisition of GCT Bayonne and GCT New York in the Port of New York & New Jersey, which is pending regulatory approvals.

In logistics, a favoured area for investment by container lines in recent years, CMA CGM acquired e-commerce logistics solutions in the shape of Ingram Micro’s Commerce & Lifecycle Services business, European automotive logistics company GEFCO, and home delivery specialist Colis Privé.

CMA CGM plans to expand its new air cargo division to 12 freighter aircraft by 2026, and has acquired a 9% stake in Air France-KLM as part of a long term air freight partnership.

Looking ahead the company commented: “Second-half 2022 trends remained at play in 2023, as market conditions in the transport and logistics industry continue to deteriorate.” It said that the balance between demand and supply was expected to remain challenging with increasing supply while demand prospects “seem uncertain”.

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CMA CGM did though see signs of some macro-economic signals were stabilising, and noted the markets of Latin America and Southeast Asia remained strong.

“The group is closely monitoring the evolutions in the economic and geopolitical situation, despite limited visibility over the rest of the year, and remains confident in its ability to weather the cycle thanks to the diversification of its businesses and its financial strength,” it said.