News / CMA CGM posts record $3.5bn profit for Q2 – and promises more to come

© Vladimir Serebryanskiy

CMA CGM has posted an astonishing 2,500% increase in its net profit, to $3.5bn, for the second quarter, compared with the same period of last year.

And it added that it should “further improve” these record results in the second half of the year, with the favourable conditions for liner shipping expected to continue into H1 22.

In addition to paying down debt, the French shipping and logistics group is using its cash windfall to aggressively grow its business; including the purchase in the past year of 14 new vessels, 32 second-hand ships and more than 500,000 extra teu in equipment.

Chairman and CEO Rodolphe Saade said the performance was driven by “higher volumes and freight rates” in container shipping, due to “an unprecedented demand”.

He added that logistics subsidiary Ceva “had continued to improve its operational and financial performance”.

He said: “While pressure on global supply chains is likely to persist, the group’s strong performance enables us to accelerate our logistics transformation and our investments in industrial assets. We are pursuing the effort initiated over the third quarter of 2020 to increase our capacity and meet our customers’ needs.”

CMA CGM’s turnover in Q2 came in at $12.4bn, up 77% on the previous year, of which $10bn came from its container liner business, which was 89% higher than before. This was earned from liftings of 5.7m teu, 19.1% higher than the pandemic-impacted downturn volume of the previous year, but more importantly, 4.4% up on the first quarter.

The carrier said container shipping activity was “particularly dynamic on the transpacific, Latin America and intra-regional routes”.

And CMA CGM’s average rate soared 59% to $1,756 per teu, on a par with rivals OOCL and Hapag-Lloyd’s $1,799 and $1,714 respectively, but considerably higher than Maersk’s $1,519 for the quarter.

Meanwhile, revenue from Ceva leaped 40%, year on year, to $2.4bn, while ebitda rose 35% to $210m.

“This performance was driven by freight management services in a supportive market environment and, to a lesser extent, by the recovery of the contract logistics activities, which had been severely impacted by the lockdown measures related to the Covid-19 pandemic in the second quarter of 2020,” said CMA CGM.

In the past year, CMA CGM has, with MSC, aggressively tapped the charter and S&P markets for extra tonnage to support its liner growth strategy. Indeed, it said the group was “accelerating its strategic transformation and investments”, which lifted its global carrier ranking back above Ocean Alliance partner Cosco to third, with a capacity of just over 3m teu, supported by an orderbook of 525,000 teu.

S&P brokers say CMA CGM continues to show “strong interest” in vessel sales, its most recent acquisitions being a quartet of 14-year-old 5,060 teu panamax ships bought this month from Greek shipowner Niki Shipping.

Of the carriers that publish results, CMA CGM is the final top-ten line to report its trading for Q2, a truly record-breaking profitable period for the container sector. Analysts now expect the cumulative profit for carriers this year to be in the region of an eye-watering $100bn.

CMA CGM last year launched an air cargo division, but did not publish those results. But it did note that it expects to add an aircraft to its four-strong fleet this year, and “new equipment” in 2022.