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France's CMA CGM earnings jump as shipping rush continues

Stock MarketsJun 04, 2021 11:55AM ET
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© Reuters. The CMA CGM Marco Polo, an Explorer class container ship docks at Elizabeth port as seen from Bayonne, New Jersey, U.S., May 20, 2021. REUTERS/Eduardo Munoz/Files

By Gus Trompiz

PARIS (Reuters) -CMA CGM, one of the world's largest container shipping groups, on Friday posted a jump in first-quarter earnings and said it expected strong demand for transporting consumer goods to continue for the rest of the year.

French-based CMA CGM's net profit rose to $2.1 billion in the first quarter from $48 million in the same period last year, while core EBITDA earnings rose to $3.2 billion from $973 million, the group said in a statement.

Container lines such as market leader Maersk have seen a boom in demand as the COVID-19 crisis has stoked buying of packaged goods by locked-down consumers, while supply chain disruption during the pandemic has further fueled freight rates.

"The sustained demand for the shipping of consumer goods seen since the summer of 2020 is expected to continue in the second half of 2021," CMA CGM said.

The privately owned group said its shipped volumes climbed 10.7%, also reflecting a favourable comparison with the first quarter of last year when the start of the pandemic hit activity in China.

To meet demand and adapt to supply chain congestion, CMA CGM added more vessels during the first quarter while continuing to expand its number of containers, which has risen by 8% over the past year, it said.

The group said it also relied on its growing non-maritime business, including a new air cargo division.

Its logistics business saw core earnings rise by 25.5% to $172 million, and remained slightly positive in net profit as CMA CGM pursued a turnaround of CEVA Logistics, acquired two years ago.

Group earnings in the second quarter should at least reach the first-quarter levels, CMA CGM said.

The group also announced the early reimbursement of $1.7 billion in loans, including the outstanding portion of a 1.05 billion euro ($1.3 billion) loan backed by the French state.

Its net debt fell by $1.2 billion compared with the end of 2020 to $15.7 billion as of March 31.

($1 = 0.8217 euros)

France's CMA CGM earnings jump as shipping rush continues
 

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