Ups and downs in Q2, but CMA CGM may be outperforming its peers

   Release date: 01/08/2023     Hits: 5569    Comment: 0    
Note: A “robust” performance in the second quarter – “despite difficult market conditions” – saw the CMA CGM group achie

A “robust” performance in the second quarter – “despite difficult market conditions” – saw the CMA CGM group achieve an industry pace-setting $1.3bn net profit for the period.

Unusually, the French container line and logistics group published its Q2 results on Friday evening, ahead of its peers, Maersk for example not publishing until this Friday and Hapag-Lloyd next Thursday, 10 August.

CMA CGM group revenue in Q2 was down 37%, compared with the Covid-swollen turnover of the previous year of $12.3bn, for a 73% reduction in ebitda, to $2.6bn.

Liner revenue fell 48%, to $8.4bn, earned from transporting a flat volume of 5.6m teu – an 11.5% increase on Q1 liftings – partly due to a rebound in demand on some trades.

“Volumes remained buoyant on the north-south lines, but transpacific and Asia-Europe were hit by the slowdown in household consumption and dealer inventory drawdowns,” said CMA CGM.

Compared with the only other Q2 liner details published to date, from OOCL, the performance of CMA CGM’s container services would seem to be above the industry par, given that the Cosco Shipping subsidiary is renowned as a bellwether of liner trade health.

OOCL’s Q2 operational numbers reflected a 63% year-on-year decline in revenue, for an average rate of $1,062 per teu, versus CMA CGM’s more respectable $1,491 per teu.

Indeed, after their best quarter of the year, ocean carriers were expected to report basically flat earnings in the remaining quarters, unless boosted by a good peak season, which now appears to be something of a damp squib. Moreover, Israeli carrier Zim has already updated its full-year outlook from a profit to a loss of up to $500m, and is offloading surplus tonnage in early charter termination and vessel re-lets.

Conversely, CMA CGM is by far the most active player in the containership charter market, with shipbroker Braemar reporting six new fixtures it agreed last week, representing over half its representative list for the past seven days. CMA CGM also has a huge orderbook, second only to MSC, of 119 ships for a total nominal capacity of 1.2m teu.

In fact, Alphaliner speculated last week that CMA CGM’s growth aspirations could soon see it overtake Maersk to become the second-ranked ocean carrier, in terms of fleet capacity.

Meanwhile, Q2 revenue from CMA CGM’s fast-expanding logistics operations was $3.8bn, for an ebitda of $356m, a 4.7% increase on the previous year, but perhaps disappointing considering its extensive list of acquisitions in 2022.

“The stability of the logistics business, in a context of declining trade, reflects both the slowdown in freight markets and the strengthening of the end-to-end supply chain services offered to CMA CGM group customers,” it said.

Revenue from CMA CGM’s other activities, including ports and terminals and air cargo, fell 5.3%, to $474m, for an ebitda of $50m, representing a 62% decline, “mainly due to lower volumes in port terminals and a less buoyant air transport market”.

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