French container ship giant CMA CGM suffered another precipitous drop in earnings during the third quarter while also citing a pickup in volumes.

The family-owned company reported third-quarter net profit of $388m, down from $7.04bn in the year-earlier period. Core earnings dropped to $2bn from $9.1bn.

The result also fell from a $1.33bn profit in this year’s second quarter.

But volumes picked up as improved demand elsewhere in the world offset a continued destocking trend in the US, the company said.

“The industry continued to normalise in the third quarter, with a return to pre-pandemic market conditions. Our performance remained very solid however, confirming the relevance of our growth strategy in terminals and logistics. We are consequently more resilient as we enter this new cycle,” said Rodolphe Saade, chairman and CEO of the CMA CGM Group.

“The slowdown in the global economy is expected to continue weighing on our industry in the period ahead, but volumes carried are still robust. We remain committed to controlling our operating costs, and are continuing to focus on decarbonising and digitalising the supply chain to best meet our customers’ needs.”

Revenue dropped 42.6% to $11.4bn, while Ebitda plunged 78.2% to $2bn.

On a pure shipping basis, CMA CGM saw volumes edge up to 5.72m teu from 5.67m teu in the year-ago quarter.

“Volumes continued to grow on the north-south and shortsea lines, while further normalising on the east-west lines, due to inventory drawdowns in the US and more moderate household consumption in an inflationary environment,” the company said.

Revenue fell 51.8% to $7.6bn, while Ebitda dropped 81.6% to $1.6bn.

“The third quarter of 2023 confirmed the trend towards normalisation in the transport and logistics markets, with a return to 2019 pre-Covid conditions. Inventory drawdowns and inflation pressure continued to weigh on performance across the transport and logistics sector,” CMA CGM said in its earnings statement on Friday.

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The operator said macroeconomic forecasts point to a relative resilience in global economic activity in 2023, albeit at a level below the historical average.

“But they do not anticipate a recovery in 2024. However, this outlook contrasts with an expected rebound in world trade in 2024. New capacity expected on the market in 2024 will likely continue to pull down freight rates,” the company said.

“In this context, CMA CGM will continue to focus on maintaining operating cost discipline, rolling out its decarbonisation policy and successfully integrating the strategic investments made over the last two years. The group will also remain attentive to the geopolitical environment.”

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