CMA CGM Group Q12022 profit zooms to $8.9bn on shipping boost
Group to take 9% stake in Air France-KLM for approx €400 million, become Air France-KLM's main private shareholder.
The CMA CGM Group reported a 70 percent increase in revenue to $18.2 billion for the first quarter of 2022 and near tripling of EBITDA to $8.9 billion, thanks to shipping activities.
The Group transported 5.3 million TEUs, a decline of 2.8 percent compared to last year but an average revenue per TEU of $2,800 saw shipping revenue touch $14.8 billion, up 73 percent from last year, and EBITDA zoom to $8.5 billion.
"During the first quarter, our Group accelerated the deployment of its strategy to become a world leader in integrated logistics," says Rodolphe Saadé, Chairman and Chief Executive Officer, CMA CGM Group. "We have also taken further steps in our energy transition by forging innovative partnerships to develop low-carbon fuels and by deciding to diversify the energy sources for our future vessels.
"Due to strong demand, lack of available transport capacity and persistent port congestion, tensions in global supply chains are expected to continue. We remain mobilised to improve service quality and to meet the logistics challenges of our customers. We are also vigilant in the face of the risk of a deterioration in the global economic situation, linked to the pandemic, the rise in inflation and the war in Ukraine."
Order book of 69 vessels
The Group has placed a new order for 16 vessels including 10 dual fuel LNG-powered and 6 dual fuel methanol-powered, bringing the orderbook to 69 vessels.
"Three new 15,000 TEU vessels and five new 15,000 TEU chartered vessels have been added to the Group's fleet during the first quarter of 2022."
As many as 95,000 containers were added during the first quarter, the statement said.
Consolidating port operations
The Group holds investments in more than 50 port terminals in 33 countries.
The Group closed acquisition of a 90 percent stake in the Fenix Marine Services (FMS) terminal in Los Angeles. The Group previously owned 10 percent of the terminal before this transaction and is therefore now its sole owner, the statement said.
"Following a call for tender process for the Port of Beirut's container terminal concession, CMA Terminals, a fully owned subsidiary of the CMA CGM Group, was retained to manage, operate and maintain the terminal for a period of ten years. Operations started in March 2022 with a target of 1.4 million TEUs and a $33 million investment plan to upgrade the terminal."
Accelerating logistics play
The acquired business of Ingram Micro's Commerce & Lifecycle Services reported an estimated annual revenue of $1.7 billion in 2021, and employs 11,500 employees in 59 warehouses across the globe with a strong presence in the United States and Europe.
"GEFCO is a European leader in contract logistics and a specialist in the automotive segment. With expertise in finished vehicle logistics, the company plays a key role in ensuring European automotive production lines continuity. GEFCO is present in 47 countries and employs around 11,500 persons worldwide, including more than 2,500 in France."
Logistics revenue increased 57 percent to $3.4 billion and EBITDA was up 45 percent to $250 million, driven by shipping and air freight activities.
Air cargo in focus
The Group has decided to make CMA CGM AIR CARGO a French freight airline and received its Air Carrier Certificate from the French Civil Aviation Authority on June 1, 2022 following the delivery of its first Boeing 777F, the statement said.
"The Group is supporting the growth of CMA CGM AIR CARGO investments in a fleet that will count 12 aircraft by 2026 including four new Airbus A350F that will join the fleet between 2025 and 2026.
CMA CGM signed a long-term strategic partnership in air cargo with Air France-KLM. "The exclusive commercial partnership will see both parties combine their cargo networks, their full freighter capacity and dedicated services in order to build an even more competitive offer thanks to the know-how and global footprint of Air France-KLM and CMA CGM.
CMA CGM will reinforce its commitment to the air freight industry by subscribing to the capital increase announced by Air France-KLM on May 24.
"CMA CGM will take a 9 percent stake in Air France-KLM's share capital for an amount of approximately €400 million, thus becoming Air France-KLM's main private shareholder. Moreover, Air France-KLM's shareholders' meeting approved the appointment of Rodolphe Saadé as a member of the board of directors."
The sharp rise in energy prices, combined with price inflation of many raw materials, is weighing on retail consumption and could have a negative impact on the economic situation and the outlook for global trade, the statement said.