FRENCH shipping giant cma CGM has reported a significant decline in revenue and profitability in its 2023 annual results as the deteriorating shipping environment dragged earnings down from the record levels of the previous year.
While the huge declines posted across key earnings metrics were no surprise to group chairman and CEO Rodolphe Saade, the carrier managed to avoid the fourth-quarter operating losses reported by competitors Maersk and Hapag-Lloyd.
'As our sector normalized, the Group's performance remained solid in 2023. 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 decarbonization and artificial intelligence, in order to pursue our sustainable and profitable development.'
Full-year 2023 revenue stood at US$47.0 billion, a 36.9 per cent year-on-year decline that was primarily attributable to the deteriorating conditions in maritime shipping markets.
EBITDA came to $9.0 billion, down 72.9 per cent compared to 2022 and also representing an EBITDA margin of 19.2 per cent that was down 25.5 points on the year before.
Net income amounted to $3.6 billion, 21.24 per cent down on 2022's net earnings of 24.88 billion.
The French shipping line carried a total of 21.8 million TEU in 2023, up 0.5 per cent from 2022. Revenue from the maritime shipping operations fell by 46.7 per cent year on year at $31.4 billion.
EBITDA stood at US$7.4 billion, versus US$ 31.6 billion the year before. EBITDA margin contracted by 30.1 points to 23.6 per cent, impacted by the 47 per cent drop in average revenue per TEU for the year to $1,437.
Revenue from the logistics business slid slightly by 5.5 per cent over the year to $15.2 billion, primarily due to the return to normal operating conditions in the freight management activities.
EBITDA came to USD 1.4 billion, 12.5 per cent higher than in 2022. EBITDA margin came to 9.0 per cent, reflecting the turnaround in contract logistics and very good performance in finished vehicle logistics.
Looking ahead, CMA C GM said: '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.
'Volume growth should remain strong in the first half, supported by these base-line effects, but the second half looks more uncertain.'
The shipping line noted that new container shipping capacity is expected to come into service, pushing global supply in excess of forecasted demand, and leading to an anticipated adverse impact on freight rates.
'However, 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.'
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While the huge declines posted across key earnings metrics were no surprise to group chairman and CEO Rodolphe Saade, the carrier managed to avoid the fourth-quarter operating losses reported by competitors Maersk and Hapag-Lloyd.
'As our sector normalized, the Group's performance remained solid in 2023. 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 decarbonization and artificial intelligence, in order to pursue our sustainable and profitable development.'
Full-year 2023 revenue stood at US$47.0 billion, a 36.9 per cent year-on-year decline that was primarily attributable to the deteriorating conditions in maritime shipping markets.
EBITDA came to $9.0 billion, down 72.9 per cent compared to 2022 and also representing an EBITDA margin of 19.2 per cent that was down 25.5 points on the year before.
Net income amounted to $3.6 billion, 21.24 per cent down on 2022's net earnings of 24.88 billion.
The French shipping line carried a total of 21.8 million TEU in 2023, up 0.5 per cent from 2022. Revenue from the maritime shipping operations fell by 46.7 per cent year on year at $31.4 billion.
EBITDA stood at US$7.4 billion, versus US$ 31.6 billion the year before. EBITDA margin contracted by 30.1 points to 23.6 per cent, impacted by the 47 per cent drop in average revenue per TEU for the year to $1,437.
Revenue from the logistics business slid slightly by 5.5 per cent over the year to $15.2 billion, primarily due to the return to normal operating conditions in the freight management activities.
EBITDA came to USD 1.4 billion, 12.5 per cent higher than in 2022. EBITDA margin came to 9.0 per cent, reflecting the turnaround in contract logistics and very good performance in finished vehicle logistics.
Looking ahead, CMA C GM said: '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.
'Volume growth should remain strong in the first half, supported by these base-line effects, but the second half looks more uncertain.'
The shipping line noted that new container shipping capacity is expected to come into service, pushing global supply in excess of forecasted demand, and leading to an anticipated adverse impact on freight rates.
'However, 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.'
SeaNews Turkey