Fourth-quarter earnings decelerated at CMA CGM, but it was not enough to keep the French container shipping giant from delivering profit growth for 2022.
The Marseilles-based company reported a fourth-quarter profit of $3.04bn, a 3.7% decline on the same period of 2021.
But the company’s full-year profit came in at $24.9bn, which represents 7% growth on 2021, as the liner operator continued to enjoy the benefits of pandemic-driven consumer demand for goods and a supply chain crunch that piled cash onto the bottom line.
“Our group achieved exceptional, historic results in 2022 that have enabled us to invest significantly in operations across our business, step up our energy transition and share the created value with our employees,” said chief executive Rodolphe Saade.
The company started the year with post-pandemic congestion and strong demand for consumer goods before the Russian invasion of Ukraine entered the scene to add a dose of geopolitical tension.
Inflation and a shift away from goods hit consumer demand, and the factors combined to hurt freight rates and port congestion, particularly in the fourth quarter.
A “wave of inventory destocking” in the US accentuated the demand stock late in the year, and volumes transported on east-west routes slumped 7.2% in the period, although CMA CGM said its north-south routes were more resilient.
Group revenue fell to $16.9bn in the first quarter, a 3.6% drop from the same period of the prior year, with ocean shipping revenue dropping 13.1% to $12.4bn.
That kept annual profit at $74.5bn, which still represented 33.1% growth over 2021.
CMA CGM said the trends that hit its results in the second half remain in play, with the continuing deterioration of market conditions and expectations for continued challenges in supply and demand.
But the company highlighted that it reinvested nearly 90% of its 2022 profits while strengthening its balance sheet and enhancing financial flexibility.
“As trade returns to normal and freight rates decline, our strategy and recent investments will prove all the more relevant and allow us to look forward to 2023 with confidence,” Saade said.
“Leveraging our financial strength and entrepreneurial spirit, we will continue to develop our operations in transport and logistics to meet the needs of our customers, who expect a group like ours to deliver the best service at the lowest possible cost, with the smallest environmental footprint.”
