CMA CGM to invest $1.6 bn in energy transition fund

Shipping giant CMA CGM has proposed to invest $1.6 billion (Euro 1.5 billion) over five years to create an energy fund to support its planned transition to a zero-emission company.

Termed PULSE, the CMA CGM Energy Fund will be used to step up the group’s energy transition across maritime, overland, and air across the shipping and logistics business world.

In 2023, the company claims to have committed $490 billion (Euro 453 million) of PULSE funds to 40 projects, including Carbon - France’s largest solar panel production plant, Verkor - an EV battery giga-factory and Neoline - a wind-powered ro-ro vessel now under construction. 

The group is investing more than $15 billion to create a fleet of nearly 120 LNG and methanol-powered ships by 2027. 

Besides, it is upgrading its current fleet to improve its energy efficiency by innovating in hydrodynamics, aerodynamics, and other design factors. 

CMA CGM also took delivery of the Mermaid, the first in a series of 10 container vessels with a unique design for better energy performance. 

The company reported a 36.9 percent year-on-year decline in full-year 2023 revenue, at $47.0 billion, which it attributed to market deterioration. 

The net income of the group stood at $3.6 billion. 

Earnings before interest, tax, depreciation, and amortization (EBITDA) stood at $9 billion, while the EBITDA margin declined to 19.2 percent, down 25.5 points year-on-year.  

While its net debt stood at $3.7 billion, CMA CGM said its balance sheet is solid enough to weather cyclical downturns while continuing to invest. 

The company handled 21.8 million TEUs of container cargo during 2023, which was up 0.5 percent year-on-year. Revenue from the maritime operations was down 46.7 percent at $31.4 billion.

Revenue from the logistics business was down 5.5 percent at $15.2 billion, as freight operating conditions returned to normal.

Despite an expected rebound in global trade for goods, driven by consumer spending, the company expects 2024 to be sluggish with weak global economic growth.

Also, with new container shipping capacity addition, and the creation of excess supply will have an adverse impact on freight rates, the company noted.