CMA CGM has announced its Q1 results, with the first quarter of 2022 continued to be impacted by Covid-19 pandemic, with a return to lockdowns in certain parts of the world, major tension on global supply chains and geopolitical tensions.
Against this backdrop, and to support the growth of the transport market in the years ahead, CMA CGM has continued with its investments to strengthen its shipping, port, logistics and air freight network. These investments will allow CMA CGM to provide comprehensive solutions and improve the quality of service to its customers while stepping up its energy transition. With this ambitious investment program, the Group aims to strengthen its customers’ supply chains to serve the global economy. An example of this investment program is that of buying into AirFrance.
The current operating environment is affected by port and inland congestions, as well as scarcity of assets. This has resulted in a marked increase in operating expenses, in particular vessel chartering costs, additional port handling costs, and labour costs for logistics activities. Moreover, the recent deterioration of the geopolitical situation has triggered major energy price increases which have led to a 46% rise in bunker costs between the first quarter of 2021 and the first quarter of 2022.
The Q1 results were strong, showing growth of 69.9% compared to Q1 2021. The total revenue rose from US$10.72bn to $18.22bn. EBITDA increased by 178.6%, up from $3.19bn to $8.87bn. This expanded the EBITDA margin, moving from 29.7% to 48.7%, highlighting the strength of the company over the first quarter. Areas of strength were mainly from the Group’s shipping activities, helping net income reach $7.2bn, moving from $2.08bn in 2021.
The volume of TEUs contract by 2.8% in Q1 2022, whilst revenues grew by 73.2%, highlighting that rates are at particularly high levels. The revenue figure grew from $8.57bn to $14.85bn in 2022. Volume growth is currently constrained by port and inland congestion which has led to longer transit times for vessels. EBITDA again was up a large amount, moving 187% from $2.98bn to $8.54bn. this was driven by higher operating expenses and therefore operating costs, added to the bunker costs increasing by around 46%.
CEVA Logistics saw a revenue rise of 57.2% in 2022, moving from $2.15bn in 2021 to $3.39bn. This growth was driven by shipping and air freight activities. Contractual logistics activities continued their turnaround despite the inflationary context that weighed on operations and profitability. CEVA mitigated this impact through its commercial dynamism in the Consumer & Retail sector, and e-commerce in particular.
Uncertainties weighing on global trade
Persistent major tensions on supply chains continue to weigh on the global fleet’s effective capacity since the beginning of 2022 and on the Group’s operations. The generalization of port congestions leads to a deterioration of the quality and service and constrains shipping volumes.
In addition, the Group is closely monitoring the evolution of the current geopolitical situation and its consequences on the macro-economic outlook.
Even if the Group remains confident about its financial performance prospects for 2022, the current environment and its medium and long-term consequences remain uncertain. The sharp rise in energy prices, combined with price inflation of many raw materials, is weighing on retail consumption and could have a negative impact on the economic situation and the outlook for global trade.
Source: CMA CGM