CMA CGM 2023 net income drops 85%

French logistics major CMA CGM group reported an 85 percent drop in net income at $3.64 billion for 2023 compared to $24.88 billion in 2022. Revenue declined 37 percent to $47.02 billion from $74.50 billion in 2022, primarily attributable to the deteriorating conditions in maritime shipping markets, says an official release.

"EBITDA came to $9 billion, representing an EBITDA margin of 19.2 percent that was down 25.5 points on the year before."

Revenue from shipping operations dropped 47 percent to $31.4 billion even as volume carried was marginally higher at 21.8 million TEUs.

"EBITDA stood at $7.4 billion versus $31.6 billion the year before. EBITDA margin contracted by 30.1 points to 23.6 percent, impacted by the 47 percent drop in average revenue per TEU for the year to $1,437."

Revenue from the logistics business slid slightly (5.5 percent) to $15.2 billion, primarily due to the return to normal operating conditions in the freight management activities, the release added.

"EBITDA came to $1.4 billion, 12.5 percent higher than in 2022. EBITDA margin came to nine percent, reflecting the turnaround in contract logistics and very good performance in finished vehicle logistics."

Other activities including terminals, CMA CGM Air Cargo and group investments reported a 11 percent increase in revenue at $2billion and an EBITDA of $236 million, down 47 percent YoY.

CMA CGM Air Cargo continued to expand over the year and now operates a fleet of five aircraft, which will be strengthened in 2024 with the delivery of two Boeing 777F freighters, the release added.

"As our sector normalised, the Group's performance remained solid in 2023," says Rodolphe Saadé, Chairman and Chief Executive Officer, CMA CGM Group. "Shipping market conditions deteriorated progressively during the year. Our results are down as we expected. Logistics, on the other hand, is proving more resilient, and accounts for a significant part of our business. Our Group now stands on two solid pillars, which will enable us to weather cyclical changes more efficiently. Backed by our financial strength and the commitment of our employees, we will continue to invest in the transformation of the Group, particularly decarbonisation and artificial intelligence, in order to pursue our sustainable and profitable development.”

2024 outlook
2024 is likely to be shaped by sluggish global economic growth although global trade for goods is expected to rebound from 2023 lows, driven by consumer spending and replenishing inventories, the release added. "Volume growth should remain strong in the first half, supported by these base-line effects, but the second half looks more uncertain."

Late 2023 saw the emergence of new geopolitical tensions with the situation in the Red Sea and the targeted attacks on merchant ships, creating risks and major uncertainties for the maritime shipping industry. "In this environment, the Group is paying close attention to the changing economic and geopolitical situation while remaining confident in its ability to weather the cycle, thanks to its business diversification and financial strength."