PARIS - French shipping giant CMA CGM has reported a significant decline in profits and revenues for the third quarter of 2023, amid broader industry challenges and a return to pre-pandemic market conditions. The company's net profit plunged by 94% to $388 million compared to the same period last year when it was $7.04 billion. Revenues also fell sharply, down 42.6% year-on-year to $11.43 billion from $19.9 billion.
Despite these headwinds, CEO Rodolphe Saadé highlighted the resilience of CMA CGM's growth strategy. The logistics sector, including the LNG-powered CMA CGM Jacques Saade, contributed 32% or $3.76 billion to the total revenues, as part of a rebalancing effort within the company's business segments.
The group's EBITDA for Q3 stood at $2.0 billion, marking a significant reduction of 78.2% from the previous year, with an EBITDA margin of 17.5%. Shipping operations revenue saw a 51.8% decrease year-over-year to $7.6 billion due to normalized freight rates and inventory drawdowns in the United States. However, volumes carried increased slightly by 0.9%, totaling 5.7 million TEUs.
Logistics operations brought in revenue of $3.7 billion in Q3, with an EBITDA of $348 million, which is a modest 3.0% decrease from the previous year. Contract logistics maintained stability, and finished vehicle logistics performed well despite moderate household consumption in an inflationary environment.
In August 2023, CMA CGM expanded its footprint by acquiring GCT Bayonne and New York container terminals for $2.8 billion, rebranding them as Port Liberty Bayonne and Port Liberty New York. Additionally, the group has made a significant investment of $17 billion in LNG- and methanol-powered ships to align with its Net Zero Carbon by 2050 ambition.
Other activities including port terminals and air cargo experienced a revenue increase of 5.3% to $526 million; however, their EBITDA fell by more than half to $56 million.
Looking forward into 2024, CMA CGM remains optimistic about recovery prospects despite expectations of a rebound in world trade and new capacity that could pressure freight rates further. The company is focusing on controlling operating costs and advancing decarbonization and digitization initiatives to meet evolving customer needs in the face of a global economic slowdown.
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