CMA CGM is another shipping company talking about “heightened geopolitical tensions and unprecedented uncertainty” in its just published results summary. Yet in 2024 it has profited from this uncertainty.
The numbers are impressive. Volumes of containers carried were up 7.8% year-on-year at 23.57m TEU. Yet revenue for the whole company was up 18% year-on-year at US$55.8bn whilst EBITDA (Earnings Before Interest Tax, Depreciation and Amortisation) was 49.3% year-on-year at US$13.45bn. Net income was up 56% year-on-year at US$5.71bn.
At the core container shipping business, the increase in revenue year-on-year at 16.2% and a 51.9% increase in EBITDA to $11.24bn was the result of 7.2% hardening of margins. Profit margins are now 30.8%, which approaches the extraordinary profitability of 2021-22.
The ‘Logistics’ business was buoyed by the acquisition of Bollore Logistics, resulting in a 20.9% increase in revenue to $18.4bn. Some dilution in profits might have been expected in this, yet what CMA CGM said was a “turnaround in contract logistics and a good performance in finished vehicle logistics, despite the difficulties impacting the automotive sector” resulted in EBITDA up 28.3% year-on-year at $1.8bn. Again, margins at 9.6%, are high for the sector.
The ‘Other Activities’ business, that includes both the container terminals operation and airfreight also saw revenue climb impressively, up 43.3% to $2.9billion whilst EBITDA was up 87.2% at $441m, something ascribed to “consolidation and a good performance by the terminal’s portfolio” although surely the airfreight assets must have contributed as well to the rise in profits.
CMA CGM does not publish full audited accounts and so it is difficult to be confident about the details of this performance in 2024, however it is hardly surprising that the company described the year as benefiting from “increased demand for maritime container shipping…buoyed by stronger-than-expected growth in world trade and inventory rebuilding” and that global capacity faced a “negative shock from geopolitical tensions”. The signs over the past month is that some of these factors are changing and that freight rates in container shipping at least are falling. CMA CGM said that it expected “stable global economic growth of around 3%” in 2025 but that higher tariffs and “deliveries of new vessels, combined with any developments in the Red Sea situation” would be “decisive factors in shaping the market”. The container shipping market at least, may not be as generous to CMA CGM in 2025.
Author: Thomas Cullen
Source: Ti Insight
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