CMA CGM Sees Drastic Decline in Net Income for Third Quarter 2023
French carrier CMA CGM reported a 94% decline in net income at $388 million for the third quarter ended September 30, 2023 on deteriorated market conditions in the transport and logistics industry.
Commenting on the results for the period, Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, said: “The industry continued to normalize in the third quarter, with a return to pre-pandemic market conditions.
"Our performance remained very solid however, confirming the relevance of our growth strategy in terminals and logistics. We are consequently more resilient as we enter this new cycle.
"The slowdown in the global economy is expected to continue weighing on our industry in the period ahead, but volumes carried are still robust.
"We remain committed to controlling our operating costs, and are continuing to focus on decarbonizing and digitalizing the supply chain to best meet our customers' needs.”
First-half 2023 trends remained at play in the third quarter of 2023, with deteriorated market conditions in the transport and logistics industry.
Revenue stood at US$11.4 billion in the third quarter of 2023, with a gradual rebalancing of contributions from the Group’s maritime shipping and logistics businesses.
EBITDA came to US$2 billion, 78.2% lower than in third-quarter 2022. EBITDA margin came in at 17.5%, down 28.5 points and net income for the Group amounted to US$388 million. The debt net of financial resources totaled US$0.1 billion at September 30, 2023.
The Group is continuing to invest in its operating assets and in the energy transition for shipping and logistics.
At the end of August 2023, CMA CGM completed its USD 2.8 billion acquisition of the GCT Bayonne and New York container terminals, renamed Port Liberty Bayonne and Port Liberty New York.
CMA CGM is pursuing its voluntary investments to diversify the energy mix of its vessels, aiming to achieve Net Zero Carbon by 2050. It has already invested more than US$17 billion in a fleet of nearly 120 LNG- and methanol-powered ships to be delivered by 2027.
The third quarter of 2023 confirmed the trend towards normalization in the transport and logistics markets, with a return to 2019 pre-Covid conditions. Inventory drawdowns and inflation pressure continued to weigh on performance across the transport and logistics sector.
Macroeconomic forecasts point to a relative resilience in global economic activity in 2023, albeit at a level below the historical average, but they do not anticipate a recovery in 2024.
However, this outlook contrasts with an expected rebound in world trade in 2024. New capacity expected on the market in 2024 will likely continue to pull down freight rates.
In this context, CMA CGM will continue to focus on maintaining operating cost discipline, rolling out its decarbonization policy and successfully integrating the strategic investments made over the last two years.
The Group will also remain attentive to the geopolitical environment.