SIMIC

MAJOR French container liner CMA CGM is reinvesting for the future as it racked up a US$24.9 billion net profit in 2022 despite a marked decline in performance in the fourth quarter.
The container line reported a net profit of $24.9 billion for 2022 up from $17.9 billion for the previous year, while revenues were up 33.1 per cent at $74.5 billion, reports UK's Seatrade Maritime News.
A fourth-quarter drop in freight demand did little to dent CMA CGM's annual revenue and profitability in 2022, with the container line reporting $33.3 billion in operating income for the year, up more than 44 per cent.
CMA CGM described 2022 as year of contrasting halves with the first half characterized by high consumer demand and shipping capacity constrained by port congestion and supply chain issues.
By contrast the second half of the year saw a demand shock that worsened in the fourth quarter with US inventory destocking, the impact of inflation on consumer spending, and an energy crisis in Europe. The result was the company saw a 7.2 per cent decline in container volumes on east-west trade routes in Q4 of last year.
Commenting on the results Rodolphe Saade, chairman and CEO of the CMA CGM Group, said: "Our group achieved exceptional, historic results in 2022 that have enabled us to invest significantly in operations across our business, step up our energy transition and share the created value with our employees.
"As trade returns to normal and freight rates decline, our strategy and recent investments will prove all the more relevant and allow us to look forward to 2023 with confidence."
The company said that it had reinvested close to 90 per cent of net profit for 2022 in assets and capabilities, in addition to strengthening its balance sheet.
Investments included 100 per cent ownership of Fenix Marine Services terminal in Los Angeles/Long Beach, and late last year it announced the acquisition of GCT Bayonne and GCT New York in the Port of New York & New Jersey, which is pending regulatory approvals.
In logistics, a favoured area for investment by container lines in recent years, CMA CGM acquired e-commerce logistics solutions in the shape of Ingram Micro's Commerce & Lifecycle Services business, European automotive logistics company GEFCO, and home delivery specialist Colis Prive.
CMA CGM plans to expand its new air cargo division to 12 freighter aircraft by 2026, and has acquired a 9 per cent stake in Air France-KLM as part of a long term air freight partnership.
Looking ahead the company commented: "Second-half 2022 trends remained at play in 2023, as market conditions in the transport and logistics industry continue to deteriorate." It said that the balance between demand and supply was expected to remain challenging with increasing supply while demand prospects "seem uncertain".
CMA CGM did though see signs of some macro-economic signals were stabilizing, and noted the markets of Latin America and Southeast Asia remained strong.
"The group is closely monitoring the evolutions in the economic and geopolitical situation, despite limited visibility over the rest of the year, and remains confident in its ability to weather the cycle thanks to the diversification of its businesses and its financial strength," it said.