CMA CGM Expects Marked Slowdown Will Continue in 2023

CMA CGM expects the marked slowdown seen in the fourth quarter of 2022 to continue in the current year, the French transport and shipping group said on Friday, citing inflationary pressures weighing on consumption.

The company based in Marseille and privately controlled by the founding Saade family, said it expects balance between supply and demand to remain challenging in 2023, as capacity is expected to increase in both maritime shipping and air freight.

Demand prospects seem uncertain, CMA CGM added, citing dealer inventory destocking in the United States as consumer purchasing power has come under pressure.

"Second-half 2022 trends remained at play in 2023, as market conditions in the transport and logistics industry continue to deteriorate," said the group in a statement.

The unlisted shipping group posted a 3.6% year-on-year drop in fourth-quarter revenue, to $16.89 billion, while earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $5.69 billion, down 30.9% from the previous year.

Market conditions in the transport and logistics industry continued to deteriorate in the second half of 2022, the group said, citing geopolitical tensions, macroeconomic uncertainty, and a sharp decrease of freight rates.

To address these challenges, CMA CGM said it reinvested almost 90% of its 2022 net profits in its industrial assets and capabilities, strengthened its balance sheet and enhanced its financial flexibility.

Full year revenue for 2022 stood at $74.5 billion, a 33% increase from 2021, while EBITDA came to $33.3 billion, up 44.2% year-on-year.

(Reuters - Reporting by Dina Kartit and Augustin Turpin, Editing by Dominique Vidalon and David Gregorio)