November 19, 2021
• Continued increase in revenue and EBITDA.
• Reduction in net debt.
• Stepping up investments supporting the Group's strategic growth:
- Shipping: expansion of the fleet which will count 44 "e-methane ready" vessels by the end of 2024.
- Ports: acquisition of the Fenix Marine Services terminal in Los Angeles.
- Air freight: ordering of four Airbus A350F, a new generation aircraft, to accelerate CMA CGM AIR CARGO's growth.
- Environment: major partnership with ENGIE to develop synthetic methane, an energy of the future.
• Logistics: strong improvement in financial performance driven by the transformation of CEVA Logistics.
• The Group continues to support its clients' business in a context of strong demand for transport.
The Board of Directors of the CMA CGM Group, a world leader in shipping and logistics, met today under the chairmanship of Rodolphe Saade, Chairman and Chief Executive Officer, to review the financial statements for the third quarter of 2021.
Commenting on the results just released for third quarter 2021, Rodolphe Saade, Chairman and Chief Executive Officer of the CMA CGM Group, said:
"We delivered very good financial results this quarter, enabling us to continue our development and accelerate our transformation.
In an unprecedented context of strong tensions in global supply chains, our priority remains to support our customers with a complete range of solutions addressing their increased needs for shipping and logistics." The CMA CGM Group continues to step up its investments for more efficient supply chains
In response to strong pressure on supply chains and to support the growth of the transport market in the coming years, the Group has continued with its investments to strengthen its shipping, port and airfreight logistics network. These investments will allow CMA CGM to provide comprehensive solutions and improve the quality of service in order to optimize its strategic development for the years to come while also pursuing its actions to promote the energy transition. With this ambitious investment program, the Group aims to build supply chains to serve the global economy.
Strengthening the maritime fleet with vessels that promote energy transition
• A 5.9% increase in shipping capacity between September 2020 and September 2021,
• 10 new owned vessels and three new 15,000 TEU (twenty-foot equivalent unit) chartered vessels have joined the Group's fleet since the beginning of the year,
• Acquisition of 49 second-hand vessels since January 1, 2021,
• 800,000 additional containers over 15 months to reach 4.8 million units.
Since 2017, CMA CGM has chosen to invest in dual-fuel vessels that run on liquefied natural gas (LNG) and allow to almost fully reduce atmospheric pollutant emissions. This represents a first step in reducing greenhouse gas emissions. The engine installed on these vessels is already capable of using BioLNG from biomethane (-67% in CO₂ emissions) or synthetic methane (including e-methane). In line with its decarbonization strategy, the Group is stepping up its investments and partnerships to introduce increasingly innovative solutions:
• Long-term strategic and industrial partnership with ENGIE aimed at developing an industrial synthetic methane production and distribution network using various technologies (pyrogasification and methanation using green hydrogen and captured CO2). This major partnership will facilitate the sharing of both groups' expertise and R&D capabilities, in particular in key technologies such as carbon capture and green hydrogen production.
• Launch of the first liquified biomethane production project (BioLNG) dedicated to shipping, at the Port of Marseilles, in partnership with Elengy (an ENGIE subsidiary), Metropole Aix-Marseille-Provence and TotalEnergies. The BioLNG will be produced using household waste from the Marseilles Provence Territory. This project will benefit from the existing infrastructure at the Port of Marseilles.
The CMA CGM Group's "e-methane ready" fleet currently includes 20 vessels in service and will have a total of 44 by the end of 2024.
The Group consolidates its position as a leading global port operator
CMA CGM's port operation strategy aims to support the growth of its shipping trade lanes and further improve the quality of service provided to its customers. In the current context of global trade congestion, the Group has improved its overall management of logistic chains thanks to several port investment projects launched since the beginning of the year:
• Signing of the acquisition of 90% of the Los Angeles Fenix Marine Services terminal, one of the largest port terminals in the Los Angeles/Long Beach region and a major gateway for US imports1,
• 35-year concession agreement for the new container terminal at Khalifa Port in Abu Dhabi,
• Signing of a long-term joint venture to equip and operate the new container and general cargo Tahya Misr terminal at the Port of Alexandria,
• Acquisition of the company which operates the Port of Tripoli's container terminal in Lebanon,
• Acquisition of a 50% stake minus one share in Spain's Total Terminal International Algeciras (TTIA) port terminal, which is strategically located on the Mediterranean side of the Strait of Gibraltar.
The Group holds stakes in 49 port terminals across 27 countries, via its two subsidiaries CMA Terminals and Terminal Link (joint venture).
An order for four Airbus A350F and the development of a new French freight airline
Launched in February 2021, the airfreight division CMA CGM AIR CARGO currently operates four Airbus A330-200F, and will receive two new aircrafts in spring 2022.
The Group continues to develop its freight business for the years ahead and has ordered four Airbus A350F. CMA CGM will be launch airline for this new aircraft. With a carrying capacity of more than 100 tons and an operating range of some 9,000 kilometers, the A350F will enable CMA CGM AIR CARGO to reinforce its long-haul offer, to better meet the needs of its customers and their markets. With its state-of-the-art technologies and, in particular, optimized fuel consumption the A350F will, upon delivery, offer the best environmental performances in the airfreight sector both in terms of noise and CO2 emissions.
The Group has decided to make CMA CGM AIR CARGO a French freight airline. In this regard, CMA CGM AIR CARGO has filed an application for an Air Operator Certificate (AOC) with the French Civil Aviation Authority (DGAC - Direction generale de l’aviation civile). In addition, the new aircrafts that will join the Group's fleet in spring 2022 will be registered in France and will be based at Paris-Charles de Gaulle airport.
The creation of a French freight airline also requires the initial recruitment of around fifty pilots who will join the CMA CGM Group during the coming weeks, and the implementation of a structure dedicated to the Group's airfreight operations.
Moreover, during the third quarter of 2021, CMA CGM acquired Continental Rail, a rail freight operator in Spain, while CEVA Logistics acquired Cargex, a perishable goods expert in Columbia to enhance its Latin America offering.
CMA CGM continues to support its customers' business
A responsible Group which supports its customers in an unprecedented global situation
Faced with a marked increase in "spot" shipping freight rates due to the impact of port congestions and the major imbalance between demand and effective shipping capacity, the Group decided, on September 9, to stop any further increases in "spot" freight rates for all services operated by its shipping brands (CMA CGM, CNC, Containerships, Mercosul, ANL, APL). This decision will apply until February 1, 2022.
Moreover, CMA CGM is working with its customers to offer multi-year contracts that will allow them to secure their medium-term shipping needs.
Through this measure, CMA CGM reiterates its commitment to supporting its customers at a time of strong pressure on global supply chains and favor medium- and long-term relationships.
The Group continues its digital transformation to support its customers' businesses
By launching NETWORKING SERVICES, the industry's first business matchmaking marketplace, the Group helps put its customers directly in touch with their future business partners in a seamless and secure manner. This unique and unrivaled digital platform, developed in partnership with CEVA Logistics, enables the Group's customers to expand their business worldwide, to create new business opportunities and to find the suppliers or customers that best fit their needs, all while saving on cost and time and reducing the effort and risks associated with sales growth.
Operating and financial performance for the third quarter of 2021
During the third quarter, the Group's consolidated revenue reached USD 15.3 billion, representing an 89.4% increase compared with the third quarter of 2020. This performance was mainly driven by the Group's shipping activities.
EBITDA came in at USD 7.1 billion, representing an EBITDA margin of 46.4% (a 25.4 point increase compared with the third quarter of 2020).
Net income, Group share was USD 5.6 billion.
The Group continued to strengthen its financial structure. Net debt stood at USD 11.9 billion on September 30, 2021, down USD 4.9 billion from December 31, 2020. Just after the close of the quarter, on October 15, 2021, the Group redeemed its bond maturing in 2025 for an amount of EUR 750 million.
During the third quarter of 2021, the Group transported 5.5 million TEUs. This represented a 2.5% decrease compared with the third quarter of 2020 when global trade rebounded markedly following the end of Covid-related lockdowns in Western countries. Growth in volumes is currently constrained by congestions affecting port terminals and inland infrastructures, leading to longer transit times for vessels.
The Group's shipping revenue reached USD 12.5 billion, representing a 101% increase compared with the same period in 2020.
EBITDA for shipping was USD 6.8 billion. The EBITDA margin reached 54.4%, a 30-point increase compared with the third quarter of 2020, driven by average revenue per TEU of USD 2,293 and despite higher operating expenses (notably bunkers, vessel chartering costs, port handling).
Logistics revenue reached USD 2.9 billion, representing a 55% increase compared with the third quarter of 2020. This performance was driven by freight management services, and in particular the Ocean segment in what was a favorable market backdrop, as well as, to a lesser extent, the continued turnaround in contract logistics activities which had been negatively impacted by lockdown measures relating to the Covid-19 pandemic in 2020.
EBITDA was up 63% at USD 274 million.
CEVA has continued its upturn, in line with its transformation plan.
International trade still brisk
The pressure on effective shipping capacity for consumer goods observed since the summer of 2020 is expected to persist until at least the first half of 2022. The Group will continue to invest in strengthening and upgrading its shipping and logistics network while bolstering its financial structure.
As part of its commitment to customers around the world, the Group will continue to deploy solutions to support their business activities and ensure the continuity of their supply chains.
The current context is thus likely to enable the Group to achieve an even stronger financial performance during the fourth quarter.
CMA CGM press release