(Reuters) – CMA CGM reported a sharp rise in third-quarter net profit on Friday, driven by sustained demand in shipping amid efforts in China to export as much as possible before the imposition of new customs duties by the United States and the European Union.

In the third quarter, the world’s number three maritime transport company recorded a net profit group share of 2.73 billion dollars (2.54 billion euros), or seven times more than the previous year, when it was amounted to 388 million dollars. In 2023, the shipowner saw its results weighed down by the normalization of the logistics market after the pandemic, against a backdrop of mass destocking and inflationary pressure.

This year, the increase in demand is partly explained by “a phenomenon of anticipation and restocking” linked to geopolitical tensions, strikes in ports on the East Coast of the United States and political uncertainty around of the American presidential election, according to a press release published by the company.

Like other companies in the logistics sector, CMA CGM is waiting to see if Donald Trump will impose new customs duties on China, as promised during his presidential campaign.

In recent months, China has rushed to export many products to Europe and the United States, almost doubling its exports in October, which analysts say is a direct consequence of the prospect of a new Donald Trump’s mandate and the imposition of new customs duties by the European Union.

“We are indeed seeing demand which remains sustained and then the Chinese New Year seems to be preparing this year a little earlier than usual. We have a high occupancy rate on our ships, particularly on all the Asia-Europe lines,” Ramon Fernandez, the group’s financial director, told reporters.

He also said it was too early to predict the impact of Donald Trump’s return to the White House on trade, but the global economy appeared strong and adjustments to tariffs could be found, such as when Mexico and Southeast Asia have replaced some of China’s imports into the United States.

The French shipowner also reported a 149% increase in its earnings before interest, taxes, depreciation and amortization (Ebitda), the operational challenges posed by the obligation to bypass the Red Sea via the Cape of Good Hope due to attacks by Yemen’s Houthis having been offset by the resulting rise in freight prices. Over the July-September period, the group’s EBITDA amounted to $4.96 billion.

In terms of outlook, the group said it expects new geopolitical, macroeconomic and regulatory challenges, adding that the sector could be overcapacity in 2025, particularly if traffic in the Red Sea were to resume normally.

In France, CMA CGM expects to face an exceptional tax of around 800 million euros on its freight profit under the new government budget, Ramon Fernandez said.

This sum would have a negative impact on the group’s investments, which notably acquired 48% of the Brazilian logistics company Santos Brasil this quarter, but it is not yet possible to specify which projects would be affected, he added.

(Reporting by Gus Trompiz, written by Pauline Foret, edited by Kate Entringer)

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