Despite another spike in profits due to a saturated shipping market, CMA CGM said on Friday that geopolitical and economic uncertainties were clouding its outlook, says an article published in U.S. News.
Net Worth
CMA CGM, a container line established in France, announced a net profit of $7.2 billion in the first quarter, up from $2.1 billion the year before and above the $6.7 billion achieved in the fourth quarter of 2021.
Economic rebound
Following the initial impact of the COVID-19 epidemic, the economy rebounded, sending freight rates soaring and transportation capacity stretched.
Strong revenues per container offset increased costs for CMA CGM’s primary ocean shipping operation, notably a near 46 percent increase in vessel fuel expenses year over year.
“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,” CMA CGM said in a statement.
Suspended services
Due to congestion at ports and on land routes, the group’s container volumes delivered declined 2.8 percent year over year in the first quarter.
Other container lines, such as Maersk, have predicted that the market will stabilise in the second part of the year.
CMA CGM, like other shipping companies, has halted operations between Ukraine and Russia as a result of Moscow’s invasion of its neighbour and the sanctions imposed on Russia by the West.
Economic repercussions
CMA CGM, which is owned by the Saade family and has limited operations in Ukraine and Russia, has warned that the conflict could have worldwide economic consequences.
CMA CGM, like its shipping contemporaries, has been able to raise its investments in non-maritime logistics as a result of rising earnings.
Last month, the company launched an aviation freight agreement with Air France-KLM, in which CMA CGM will become a major shareholder.
Liquefied natural gas
The Marseille-based group also announced a new order for 16 vessels, of which 10 to be powered by liquefied natural gas and six by methanol, taking its number of ships on order to 69.
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Source: U.S. News
