Drybulk Support: On The Charts and From The Big Players
Even though it has pulled back from its October highs, the drybulk market is still of keen interest, if the attendance at last week’s Marine Money conference is any indication....
By Mike Wackett (The Loadstar) –
CMA CGM has shot to the top of the Q3 carrier earnings league table, posting a net profit of $5.6bn for the period.
And it said there would be an “even stronger” result to come for the final quarter.
The group’s consolidated revenue soared by 89%, compared with the same period of 2020, to $15.3bn, mostly driven by its liner business.
Turnover from container shipping doubled over Q3 of last year, to $12.5bn, from a 2.5% decrease in volumes, at 5.45m teu, for an average revenue of $2,293 per teu – compared with the $1,109 per teu average a year earlier.
CMA CGM’s average rate was on a par with peers that have published results, with the exception of Israeli carrier Zim, which reported an average rate of $3,226 per teu for the quarter.
“We delivered very good financial results this quarter, enabling us to continue our development and accelerate our transformation,” said chairman and CEO Rodolphe Saade.
Comparing Q3 with its second quarter, CMA CGM saw profitability leap by a stunning 60%, with the company’s bullish outlook on the back of the signing of many more higher-rated contracts, suggesting another massive jump in its profits for the current quarter.
And the shipping group said it did not see any evidence that demand was tailing off, describing international trade as “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,” it said.
To facilitate its aggressive growth aspirations, mitigate the impact of port congestion and insulate its network against a dearth of open containership tonnage and sky-rocketing daily hire rates, CMA CGM has gone on a buying spree of second-hand vessels, adding 49 ships to its fleet since January.
And with the delivery of 13 newbuild vessels this year, this has lifted CMA CGM back above China state-owned carrier Cosco, to third-ranked, in capacity terms, by a current margin of 150,000 teu, at 3.1 million teu.
In September, CMA CGM made a surprise move to cap any further increases in spot rates across all of its liner brands until 1 February and, like its competitors, said it was “working with its customers to offer multi-year contracts”.
It is also continuing to develop the synergies of its integrator strategy ,with logistics arm Ceva growing its revenue by 55% in Q3, compared with the previous year, to $2.92bn, representing a 63% ebitda increase, to $274m.
“This performance was driven by freight management services and, in particular, the ocean segment in what was a favourable market backdrop,” said CMA CGM.
Meanwhile, based on the results of carriers that report their earnings, and estimating a similar profitability for the other shipping lines, New York-based consultancy Blue Alpha Capital has calculated combined earnings for the liner industry in Q3 to be an eye-watering $48bn, and a nine-month cumulative net result of $105bn.
To put the nine-month result into context, these earnings exceed the total profit made by liner companies over the past five years.The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.
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