CMA CGM profit up 350 Percent and Asked by French Government to Cut Rates
CMA CGM, the world’s third largest shipping company, posted a 350 per cent year on year increase in first quarter net profit to US$7.2 billion, 3.5 times net income in Q1 2021, topping its previous quarterly income of $6.7 billion in Q4 2021.
CMA CGM revenue per container kept rising. As with other ocean carriers, CMA CGM’s massive surge in revenues and profits in the face of constrained throughput was driven by increased freight rates.
Looking forward, the French carrier expressed the same macro concerns as many other ocean carriers.
“The group is closely monitoring the evolution of the current geopolitical situation and its consequences on the macroeconomic 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,” said the company.
This attempt to gloss over the fact of what many industry pundits say are exorbitant and exploitative tactics of shipping lines did however not go unnoticed by the French government. French Finance Minister Bruno Le Maire told CMA CGM to reduce the cost of transporting materials used by the construction sector, or expect the state to “take our responsibilities”, according to a report by Reuters.
“A small number of companies have during the crisis made profits in sectors such as energy or transport. I want them to give me strong proposals so that they give back a part of their profits to the French people,” said Mr Le Maire.
“This can take the form of a rebate on fuel prices or proposals by transport firms like CMA CGM. If they choose against not doing more, we will take our responsibilities,” he said.