CMA CGM Second-Quarter Revenue Rises 19 Percent To 15.7 Billion Dollars
CMA CGM has reported second-quarter revenue of 15.7 billion dollars, an increase of 19.2 percent on the same period a year earlier, in a set of results that shows the French group absorbing serious geopolitical disruption without losing momentum. The company attributed the performance to the strength of its maritime business, growth in logistics, the development of its terminals and the expansion of its air cargo division, noting that it delivered these numbers despite instability that has been most acute in the Middle East.
Container volumes were the foundation of the quarter. The group carried 6.3 million teu during the three months, six percent more than a year earlier, and maritime division revenues reached 10 billion dollars on the combination of higher volumes and firmer freight rates. Those rates have been supported in large part by the same disruption that has complicated the group's operations, since vessels routed around Africa absorb capacity and tighten the effective supply of tonnage on the main east-west trades.
The logistics side of the business tells a more mixed story. Revenues in the division reached 5 billion dollars, an increase of 8.5 percent year on year, but operating profit fell as a result of market pressure and continuing difficulties in the automotive sector. Contract logistics businesses tied to vehicle manufacturing have had a hard year across the industry, with volumes soft and customers pushing hard on rates, and CMA CGM's exposure through its logistics arm reflects that. Growth in the division came from new agreements with automobile manufacturers and from expansion in logistics and air cargo operations.
During the quarter the group continued to extend its maritime network with new international services and pressed ahead with its decarbonisation programme, commissioning the container ship CMA CGM Notre Dame, the largest vessel of its kind operating under the French flag. Chairman and chief executive Rodolphe Saadé said the results reflected the company's adaptability in a complex international environment and the strength of a diversified business model built to withstand shocks in any single segment.
The wider question for the container sector is how much of the current rate environment is durable. Earnings across the major carriers this year have been shaped less by demand growth than by supply absorbed through longer routings, and any normalisation of transits through the Red Sea and the Gulf would release a substantial quantity of effective capacity at a time when the orderbook is still delivering. Diversification into terminals, logistics and air cargo is the hedge most of the large carriers have chosen, and CMA CGM has pursued it more aggressively than most.
