- Levy on high-earning companies will leave carrier on hook for hundreds of millions of euros.
- Other countries could follow French lead if plan proves a successful money maker, warns CMA CGM.
The windfall tax comes along with further tax increases on wealthy households and an array of spending cuts in a bid to plug a €60 billion hole in its budget, reports Seatrade Maritime News.
CMA CGM rows back on windfall tax acceptance
A contribution from some of the profitable companies, including CMA CGM, which could pay around $870 million over a two-year period.
However, the French carrier’s CFO Ramon Fernandez, has apparently contradicted his CEO Rodolphe Saadé, saying, the levy represented a ‘competitive disadvantage’, removing funds that could otherwise be invested in the fleet. Last month Saadé had said, “We’ll be there“, when asked about the windfall tax.
If there is a solidarity contribution for companies that have made profits, CMA CGM will take its share,’ Saadé told Reuters in September, but reiterating his opposition to any change to the tonnage tax, which many European carriers have benefitted from on a large scale, particularly since the pandemic.
CMA CMG itself was some $5 billion in debt in 2009 and Rodolphe’s father, the founder and chairman Jaques urged a meeting of French employers: “I call on the competent authorities, banks and public bodies to protect the three big European maritime companies and ensure the survival of the maritime sector in Europe.”
In 2020 Paris again supported the carrier with a state guaranteed loan of $1.05 billion as the lockdowns in the early Covid period suggested shipping lines would suffer massive losses. In the event the carriers sailed through the pandemic with collective profits of over $300 billion, with CMA CGM reporting net income of $17.9 billion, $24.88 billion and $3.64 billion in 2021, 2022 and 2023 respectively.
Saadé was not always in favour of the windfall tax, with the billionaire CEO asking a Senate hearing in Paris: “When my freight rates were at $350, where were you?” We weren’t sure at one point if we would get through the week. No one came to speak with us or say something. We had to figure it out.”
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Source: Seatrade Maritime News
