News / CMA CGM see Q1 profit slump but bets on Bollore bounce

Credit DP World

A weaker market ate into CMA CGM’s Q1 with a 7% fall in revenues leading to a more than 30% profit collapse, following last year’s strong Q1. But volumes were up, year-on-year, and its logistics division saw profits rise on flat revenues.

The French carrier handled more than 5.6m teu over the three months to April, up 11.7% year-on-year but this did not translate for its financials, revenues dropping from $12.7bn to $11.8bn, translating to EBITDA of just $2.3bn, compared to $3.4bn a year earlier.

Chief executive Rodolphe Saadé nonetheless beat an upbeat tone, stating the group had “demonstrated its agility and resilience in adapting to new market conditions”.

“Our shipping division turned in a solid performance, buoyed by restocking in China and the United States. As for our logistics business, the acquisition of Bolloré Logistics gives us the critical mass we need to better withstand cyclical changes,” he added.

“In 2024, a year that remains uncertain due to the crisis in the Red Sea, CMA CGM will continue to meet its customers’ needs as effectively as possible.”

Referencing the rebound in volumes, the carrier cited a “stronger-than-expected world merchandise trade and demand for cargo shipping”, which it said had been driven by a rebound in consumption and inventory rebuilding following the “lows” of last year.

Added to which it pointed to the boost it received following the momentum gained from its consolidation of Bollore Logistics.

Indeed, its logistics division was able to mark off the quarter more positively, with profits (measured as EBITDA) up 6.9% at $361m on the back of a minimal 0.6% upturn in the division’s revenues ($3.9bn).

Looking forward, the group seemed to temper Mr Saadé’s optimism, highlighting ongoing uncertainties in the macro-economic and geopolitical environment.

It said that these could continue to cause fluctuations in the transport and logistics market, and weigh on its fluidity and seasonality, added to which it expects to see an impact from newbuild delivered with tonnage exceeding forecast demand.

“Ultimately affecting the supply-demand equilibrium and, by extension, freight rates,” it added.