CMA CGM expects profit to fall further for the remainder of the year after a first-quarter decline as an uncertain economy and an influx of new vessels cool the container shipping market after a record 2022.
The Marseille-based company, privately controlled by the founding Saade family, on Friday reported net income of $2.0 billion for the first quarter, compared with $7.2 billion in the same period last year, and said in a statement that it expect net income of $2.0 billion in the first quarter will be the most profitable year 2023.
CMA CGM is among shipping companies to post record profits over the past year after the COVID-19 pandemic sparked a rush in maritime traffic and the group channeled its profits into acquisitions to expand its logistics business and enter the media industry.
In a separate announcement on Friday, CMA told CGM it had offered to buy French online business newspaper La Tribune.
Earlier this month, CMA CGM agreed to buy the logistics operations of family-run conglomerate Bollore for an enterprise value of 5 billion euros ($5.5 billion), which, once completed, would be its largest deal ever.
Integrating its acquisitions is a priority for CMA CGM even though the company has “significant financial headroom,” with about $25 billion in liquidity that exceeds its debt levels, CMA CGM Fernandez told reporters in a phone call.
An expected 8% increase in global shipping capacity, compared with projected global trade growth of just 1.5%, would keep freight rates under pressure for this year, he said.
However, CMA CGM saw its maritime volumes recover after falling 5% year over year in the first quarter and expects volume growth for the full year, said Fernandez, who joined CMA CGM this year from telecoms giant Orange.
The group’s recently launched air freight division had a sluggish start to the year as demand eased after a surge during the pandemic. However, CMA CGM wants to use its joint venture with Air France-KLM and the planned acquisition of Bollore Logistics to boost the business. Fernandez added.