MARSEILLE: The Board of Directors of the CMA CGM Group, a Global player in sea, land, air and logistics solutions, met today under the Chairmanship of Rodolphe Saadé, Chairman and Chief Executive Officer, to review the financial statements for the second quarter of 2022. 

Commenting on the results for the period, Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, said: “During the second quarter, we continued to accelerate our strategy and our transformation around our two pillars: shipping and logistics. With the acquisitions of Ingram Micro CLS, Colis Privé and GEFCO and the strategic partnership with Air France-KLM, we have reached a new milestone in offering our customers a service that spans the entire supply chain.

I would like to thank our 150,000 employees for their exceptional achievements and unfailing dedication.

The global decline in consumer spending, which was already perceptible this summer, will lead to more normal international trade conditions in the second half as well as to a downturn in shipping demand. We will continue to invest both in our development and in the energy transition, which is more important than ever.”

Increased investments to support Group customers across their supply chains

A full 90% of consolidated profits have been reinvested to prepare for new growth in the years ahead and to address environmental challenges. The CMA CGM Group has undertaken strategic investments to increase its maritime shipping capacity (vessels and equipment) and to develop a comprehensive, consistent portfolio of logistics solutions. These outlays will enable CMA CGM to offer integrated, 

end-to-end solutions and to improve the quality of customer service, while accelerating the Group’s energy transition.

The Group has been impacted by the unstable geopolitical situation, in particular with an increase in unit bunker costs driven by increased in energy prices. 

On a like-for-like consumption basis, these higher energy prices led to a USD 1.1 billion year-on-year increase in fuel costs in the first half of 2022.

CMA CGM has continued its strategic transformation with targeted acquisitions for a comprehensive, consistent range of logistics solutions

The CMA CGM Group is committed to meeting the needs of its customers across their supply chains. The first half of 2022 saw three strategic acquisitions that have strengthened the capabilities of CMA CGM Group subsidiary, CEVA Logistics:

• Ingram Micro’s Commerce & Lifecycle Services business,  Colis Privé  and GEFCO.

Acquiring strategic equity stakes to develop a new range of end-to-end transport solutions 

CMA CGM Air Cargo: a major long-term strategic partnership with Air France-KLM

In line with its commitment to making CMA CGM Air Cargo a French air freight carrier, the Group obtained its Air Operator Certificate (AOC) from the French Civil Aviation Authority on June 1, 2022. Following the delivery of two Boeing 777Fs and the hiring of around 50 pilots, CMA CGM Air Cargo began operating in early June from its new base at Paris Charles-de-Gaulle airport.

The Group is supporting the growth of CMA CGM Air Cargo by investing in its fleet, which will be composed of 

12 aircraft by 2026. Of these, 10 will be operated by the CMA CGM Group and two by Air France-KLM.

Space: Partnerships with space industry leaders

In recent years, CMA CGM has been exploring ways to identify, design and develop innovative solutions to support maritime shipping and logistics, with a focus on satellite and space-based connectivity. As part of this process, the Group has formed partnerships with space industry leaders, such as France’s National Centre for Space Studies (CNES) in June 2021 and Thales Alenia Space in November 2021. More recently, CMA CGM acquired a stake in the Eutelsat Group, to pursue the process and develop innovative solutions. 

Investments to accelerate the energy transition in shipping and logistics Second-quarter 2022 operating and financial performance

Group: robust performance and a stronger balance sheet Revenue stood at USD 19.5 billion in the second quarter of 2022, mostly driven by the Group’s maritime shipping business.

EBITDA came to USD 9.6 billion, representing an EBITDA margin of 49.2%.

The Group continued to strengthen its balance sheet, supported by its operating performance. Net debt totaled USD 5.4 billion on June 30, 2022 (after accounting for current financial investments), down USD 1.5 billion from March 31, 2022.

Maritime Shipping: Higher revenue and wider margins 5.6 million TEUs were carried in the second quarter of 2022, down 1.3% from the prior-year period. Volume growth is currently being dampened by the congestion in ports and overland supply chains, which has led to longer vessel transit times.

Revenue from the maritime shipping operations amounted to USD 16.0 billion.

EBITDA rose sharply to USD 9.1 billion for the period, led by the USD 2,850 in average revenue per TEU at a time of rising operating costs (particularly bunker, vessel chartering and port handling costs). In all, operating costs increased by more than 22% year-on-year, with unit bunker costs in particular surging almost 75% over the period.

 Revenue from logistics operations totaled USD 3.8 billion in the second quarter of the year, while EBITDA came to USD 340 million.

Growth was primarily driven by the maritime and air freight management activities. The contract logistics business continued to recover. Dynamic business performance in e-commerce and other Consumer & Retail segments enabled CEVA logistics to mitigate the adverse impact of the inflationary environment, which is weighing on operations and margins.

CEVA’s second-quarter revenue growth was also lifted by the acquisitions of Ingram Micro CLS and Colis Privé, which were completed in early April 2022. Ingram Micro CLS and Colis Privé contributed USD 375 million and USD 64 million respectively to Logistics revenue for the period.

Outlook

Inflationary pressures and uncertainties weighing on world trade The health crisis, the release of pent-up demand as lockdowns eased and the conflict in Ukraine have placed unprecedented strain on the world’s supply chains. 

The persistence of this acute pressure has impacted both effective capacity in the global fleet and the Group’s operations since the beginning of the year. Widespread Port congestion is impacting quality of service, thereby limiting the volumes carried by the ocean-going fleet.

The Group is closely monitoring developments in the current geopolitical situation and their consequences for the economic outlook. The sharp increase in energy costs, combined with rising commodity prices, 

is weighing on consumer spending and could have a negative impact on the economic situation and the outlook for growth in world trade.

In recent weeks, inflationary pressures have caused a slowdown in consumer spending and therefore a softening in demand for maritime shipping. In some regions, these developments have led to a decline in spot freight rates.