CMA CGM to call for decarbonization projects in early 2023 bankrolled by €200 mln budget
French container shipping CMA CGM is getting ready to launch a call for projects in early 2023 intended to support the decarbonization of the French shipping and port industry.
The company has already committed a €200 million budget for the projects from its five-year $1.5 billion budget, which was launched in September 2022 to accelerate its energy transition and achieve net-zero carbon by 2050.
The €200 million funding was announced by the CEO of CMA CGM Rodolphe Saadé at the beginning of November, and it comes in support of the €300 million the French Government is allocating for the development of zero-emission vessels.
“With this initiative, CMA CGM intends to drive the emergence of innovation-led projects to support the emergence of a carbon-free French shipping industry,” CMA CGM said announcing the results of the company’s business performance for the third quarter of 2022.
Through its $1.5 billion fund, CMA CGM is backing the industrial production of new fuels and low-emission mobility solutions across the company’s business base, including maritime, overland and air freight shipping, port and logistics services, and offices.
CMA CGM said that the third quarter of 2022 was shaped by persistent geopolitical tensions, which spurred higher inflation and dragged down consumer spending, which is increasingly shifting to services in the wake of COVID-19. The higher energy prices led to a year-over-year increase of $822 million in bunker costs in the third quarter of 2022, the company added.
Q3 2022 highlights:
- Revenue stood at $19.9 billion, mostly driven by the group’s maritime shipping business.
- Maritime shipping revenue amounted to $ 15.7 billion, up 25.8% year-over-year, but down 2% compared to the previous quarter, reflecting the decline in spot freight rates that began in the second quarter and continued into the third quarter.
- EBITDA came to $9.15 billion, representing an EBITDA margin of 46%.
“The CMA CGM Group once again recorded strong results in the third quarter. Over the past two years, we have significantly strengthened our financial structure and developed our business through the entire supply chain,” Saadé said.
“Declining demand has prompted a return to more normal international trade flows and a significant reduction in freight rates. In this new environment, we will continue to invest to strengthen our positioning in maritime shipping and logistics, accelerate our energy transition and provide our clients with even more efficient solutions.”
During the quarter, CMA CGM took delivery of two methane-ready dual-fuel container ships: the CMA CGM Galapagos and the CMA CGM Greenland, both French-flagged.
The company has also bolstered its investment portfolio by winning, in association with its partner J M Baxi, the tender for the privatization of the Nhava Sheva terminal in India.
Signed on July 29, the concession agreement will support business development on the west coast of India, while upgrading and expanding a 700-meter-long container terminal berth at the Jawaharlal Nehru Port to deliver enhanced capacity and quality of service. CMA CGM owns equity stakes in 50 port terminals in 33 countries.