French liner and logistics giant CMA CGM saw profit decline sharply last year amid a freight rate slowdown after two extremely profitable years in 2021 and 2022.
Net income at the Rodolphe Saade-led company took an 85% dive in 2023 to $3.64bn from $24.88bn in the previous year.
In the fourth quarter of 2023, the company even slid to a slight loss of $90m, compared with a $3.04bn profit in the same period of 2022.
A “gradual deterioration in the maritime shipping environment throughout 2023, including in the fourth quarter, [caused] an anticipated year-on-year decline in revenue and operating profit,” the company 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,” CMA CGM added.
Chief executive Saade described the company’s performance last year as “solid … as our sector normalised”.
A string of major acquisitions throughout the highly profitable years has helped turn the company into a diversified player in logistics — a business sector that has proven “more resilient” than CMA CGM’s traditional maritime business.
“Our Group now stands on two solid pillars, which will enable us to weather cyclical changes more efficiently,” Saade said.
CMA CGM completed last year the $2.8bn acquisition of the GCT Bayonne and New York container terminals.
The company furthermore agreed to acquire France’s Bollore Logistics in a deal worth about $5bn, which CMA CGM expects to help it become one of the world’s top five transport and logistics providers.
In a statement on Friday, European competition regulators approved the takeover, provided that CMA CGM divest all of Bollore’s activities in a few Caribbean countries along with some assets in mainland France.
Regulators are more difficult when it comes to La Meridionale, a France-based ferry company that CMA CGM took over last year to save it from bankruptcy.
The European Commission said in a statement on Friday that it has opened a probe into whether hundreds of millions of euros provided by the French state to subsidise La Meridionale routes between Marseille and Corsica are in line with EU state aid rules.
The investigation also applies to subsidies for French peer Corsica Linea. The total amount of state subsidies awarded to the two companies in December 2022 was to the tune of €853.6m ($924m).
CMA CGM has invested more than $15bn in the construction of nearly 120 LNG and methanol-powered ships, due for delivery by 2027.
