PARIS (Reuters) -CMA CGM said it expects a pullback in shipping markets to accelerate in the fourth quarter due to high energy prices and flagging consumer spending, and this will reduce its profitability following an earnings surge in the past year.
French-based CMA CGM, one of the world’s largest container lines, reported on Friday a net profit of $7.0 billion for the third quarter, up from $5.6 billion in the year-earlier period.
However, the net profit was down from $7.6 billion in the previous quarter, while core earnings also fell slightly from the second quarter, with CMA CGM noting an easing in spot freight rates as shipping demand softened.
Echoing its peers, CMA CGM said in a quarterly statement that elevated energy prices linked to the war in Ukraine and weakening consumer demand were dampening a shipping market that had become overheated following the COVID-19 pandemic.
CMA CGM, based in Marseille and privately controlled by the founding Saade family, said its energy costs had increased by $822 million year-on-year in the third quarter.
Its soaring profits over the past year drew calls from the French government for CMA CGM to help cushion inflation pressures. CMA CGM responded with shipping discounts for cargoes to France.
The group has used its huge earnings to support an investment spree, including acquisitions in logistics and the buying of a stake in Air France-KLM.
The company has also slashed its debt pile, with its net debt falling by $5.3 billion during the third quarter to $78 million by Sept. 30, it said.
(Reporting by Gus Trompiz, editing by Tassilo Hummel and Louise Heavens)
