CMA CGM signalled optimism for its long-term business prospects as it reported its performance for the first quarter of the year, although it noted uncertainties that will continue to impact its general operations in 2024.
For the first quarter, CMA CGM said its revenue stood at US$11.8 billion, driven mostly by the group's maritime shipping business. EBITDA totalled US$2.4 billion, 30.3% lower than in the first quarter of 2023.
"Following deteriorated market conditions experienced in the fourth quarter of 2023, the first quarter of 2024 was shaped by a rebound in spot freight rates, mainly due to disruptions in the Red Sea region. The resulting longer journey times via the Cape of Good Hope have weighed on available shipping capacity amid a rebound in demand," the French shipping and logistics company said.
CMA CGM carried 5.6 million TEUs in the January to March period, up 11.7% from the prior-year period, which it said is due to "stronger-than-expected world merchandise trade and demand for cargo shipping, driven by a rebound in consumption and inventory rebuilding following 2023 lows."
Its consolidated revenue from maritime shipping operations amounted to US$7.9 billion over the quarter, down 11.4% year on year.
CMA CGM said the Group's logistics activities continued to grow, boosted in particular by the consolidation of Bolloré Logistics on February 29 and good momentum in Contract Logistics, Finished Vehicle Logistics and Ground logistics, especially in Europe.
Revenue from logistics activities totalled US$3.9 billion in the first quarter of the year. EBITDA stood at US$361 million, a 6.9% increase in the first quarter of 2023.
CMA CGM said its first-quarter performance was "robust" while noting that persistent geopolitical tensions, particularly in the Red Sea region, shaped the start of 2024.
It noted that these tensions severely impeded the fluidity of global economic trade during the first quarter, causing a fall in effective available capacity in the shipping sector and a rebound in freight rates compared with the final quarter of 2023.
"Against a backdrop of industry normalization, our Group has 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," said Rodolphe Saadé, chairman and chief executive officer of the CMA CGM Group.
"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. We will stay on course with our strategic investments, whether in decarbonization or artificial intelligence," he added.
Bollore Logistics acquisition
Meanwhile, the group said it took a "major step forward" in its strategy to develop its logistics operations by closing the acquisition of the entire share capital of Bolloré Logistics in late February.
"This decisive transaction means that the new entity combining CEVA and Bolloré Logistics will become one of the world's top five logistics operators and represents the largest acquisition in the Group's history," the announcement said.
Looking ahead, the group noted that uncertainties in the macroeconomic and geopolitical environment could continue to cause fluctuations in the transport and logistics market and weigh on its fluidity and seasonality.
"In addition, the commissioning of newbuild deliveries is expected to continue in excess of forecast demand, ultimately affecting the supply-demand equilibrium and, by extension, freight rates," CMA CGM said.
