CMA CGM’s revenues have fallen considerably in the second quarter of 2023 as the transport and logistics market remains depressed but are still well above the pre-COVID levels.
CEO Rodolphe Saade said Friday that “performance remains robust” despite “difficult market conditions.”
The net income of the Marseille-based CMA CGM Group, a global player in shipping and logistics, was down from $7.6 billion in the same three months last year to 1,3 billion, but a significant reduction in revenue and operating profit was to be expected given the deteriorated market conditions in the transport and logistics industry, according to Rodolphe Saadé, chairman and CEO of the CMA CGM Group, who said the company remains in a healthy financial position.
The group reported net income of $1.3 billion for the second quarter of this year, while revenue stood at $12.3 billion in the second quarter of 2023, compared to $19,5 billion at the same period last year, driven mostly by the Group’s shipping business.
Ebitda dropped 73 percent to $2.6 billion, and net income to $1.3 billion, says CMA CGM in an official release.
The French giant experienced a marked slowdown in the fourth quarter of 2022, which was expected to continue in 2023, as inflationary pressures weigh on consumption.
As market conditions in the transport and logistics industry continue to deteriorate, the company is closely monitoring the evolutions in the economic and geopolitical situation, despite the limited visibility over the rest of the year.
Macroeconomic forecasts for the second half of 2023 anticipate sluggish global growth given the persistent inflationary pressures weighing on consumer spending as well as the measures taken by central banks in response, and geopolitical uncertainties.
In light of uncertain demand, new capacity arriving on the market is likely to weigh on freight rates in shipping, particularly on East-West lines.
“Given the inflationary environment, we are being particularly vigilant about keeping operating costs under control,” said CMA CGM.
Shipping Telegraph reported in May that the CMA CGM Group submitted an offer to acquire Bolloré Logistics, Bolloré Group’s transport and logistics operations, for an enterprise value of 5 billion euros.
From a strategic standpoint, the deal would be the largest since the CMA CGM Group was founded in 1978 and would represent a major strategic milestone in the Group’s development of its logistics activities, which the Group has been building since 2019, alongside the original CMA CGM shipping business.
“CMA CGM’s logistics operations are set to rank among the world’s top five players in global logistics.”
“As expected, our industry continued to normalize in the second quarter and, despite difficult market conditions, our performance remains robust,” says CEO Rodolphe Saade, adding that in recent years the company has significantly strengthened its two strategic pillars, transport and logistics.
“On that basis, our Group will pursue its transformation, as it continues to expand and to integrate recently acquired subsidiaries, while stepping up investments to decarbonize its activities,” he said.
