Business, Feature, Freight News, Sea

CMA CGM Reports ‘Robust’ Third Quarter

[ November 15, 2024   //   Gary G Burrows ]

CMA CGM Group, French shipping and logistics company, said it delivered a “robust performance” in the third quarter, driven by sustained demand in maritime shipping amid disruption to major routes.
Group revenue increased 38.5 percent to US$15.8 billion in the quarter ended Sept. 30, driven mainly by the shipping business. Earnings before interest, taxes, depreciation, and amortization totaled US5 billion, up 31.4 percent from the year-earlier period, and a 14-point improvement in EBITDA.
Sustained demand in container shipping gave rise to an early peak season and high volumes, as CMA CGM carried 6 million TEUs, up 5.5 percent. from the prior-year period. Global trade showed signs of accelerating global trade despite an environment still roiled by geopolitical tension, the prospect of port strikes on the U.S. East Coast port strikes and the U.S. presidential election.
The rerouting of vessels via the Cape of Good Hope to bypass the Red Sea has continued to impede the fluidity of global trade, resulting in longer transit times and reduced available shipping capacity.
Revenue from maritime shipping operations increased 43.4 percent to US$10.9 billion, while EBITDA gained 40.2 percent to US$4.4 billion, as average revenue per TEU totaled US$1,798.
The group’s logistics activities continued to grow, boosted by contract logistics and related impacts from the integration of Bolloré Logistics in the scope of consolidation since February 2024. Revenue from logistics operations rose 31.1 percent to US$4.8 billion, while EBITDA increased 32.8 percent to US$459 million.
CMA CGM continued to strengthen its end-to-end logistics operations, acquiring a 48 percent stake in Santos Brasil, Brazil’s leading terminal operator and owner of South America’s largest container terminal. The group also created a joint venture between CEVA Logistics and Almajdouie Logistics in Saudi Arabia.
Considering itself a pioneer in the use of alternative fuels in shipping, CMA CGM has committed US$18 billion to order 131 vessels capable of running on low-carbon energy (biomethane, biomethanol and synthetic fuels). The vessels will be operational by 2028. Twelve new vessels, powered by liquefied gas, joined the fleet in the third quarter.
CMA CGM signed a memorandum of understanding with SUEZ to step up biomethane production in Europe of up to 100,000 tons of biomethane a year by 2030.
The group has also signed a strategic partnership with Google to draw upon its AI solutions to equip employees with decision-making tools across all its operations.
Rodolphe Saadé, chairman and CEO, said the recent quarter “marked an important step in the deployment of artificial intelligence across our activities to continue enhancing the quality of service for our customers.”
Revenue from other activities, including port terminals and CMA CGM Air Cargo, increased 35.4 percent to US$749 million, while EBITD increased 70.5 percent to US$148 million.
After a very volatile 2024, CMA CGM forecasts that 2025 will be shaped by many sources of uncertainty as macroeconomic trends, regulatory changes and geopolitical challenges that may continue to weigh on the fluidity of maritime shipping and logistics.
As new container shipping capacity will come into service, CMA CGM said it may disrupt the supply/demand balance and continue to hamper freight rates.

Tags: CMA CGM Group