CMA - comment

The results from CMA CGM for the full year 2021 were always going to be good, in the end, they were as strong as we had expected. Having finished the year with $10.5bn in cash, $4.5bn higher than 2021, CMA CGM is finding ways to spend the money. Most of the planned $10bn in M&A and CAPEX in 2022 will be cash funded. In addition to $4.5bn in CAPEX, there is $5.4bn in announced M&A closing in 2022. Given limited new capacity, but also continued congestion at ports and railheads, 2022 operational performance will be stronger. There is no indication, yet, that demand is falling. Issues around port capacity caused volumes to fall 4% in Q4. congestion eased slightly during CNY but whether that is sustainable is not yet certain.

- Western economies will be hurt by the impact of sanctions against Russia especially if there is a boycott of Russian energy, and this may start to crimp volumes in H2.

- The direct disruption to CMA from the Ukraine conflict is currently small as only 2% of volumes are with Russia. However, bunker costs are rising fast, bunker adjustments on top of already very high box rates will eventually start to impact trade, as costs become even more prohibitive, although, there is no evidence of that yet. Internally, around 50% of Bunker costs (19% of Operating Expenses) are subject to bunker adjustment clauses, and CMA CGM hedges 15% - 25% of the rest.