In the midst of a debate about super profits, CMA CGM announces stratospheric profits: 7.6 billion dollars in three months!

In the midst of a debate about super profits, CMA CGM announces stratospheric profits: 7.6 billion dollars in three months!

Which put a token in the jukebox. As the debate over corporate superprofits continues, French shipowner CMA CGM announced on Friday that it posted a net profit of $7.6 billion in the second quarter, more than last year, while turnover increased 57% in a year, to 19.48 billion dollars. The performance is stratospheric. On average each day, the shipowner led by Rodolphe Saadé generates a net profit of 84.4 million dollars. Since the beginning of the year, profits are around 15,000 million dollars, almost as much as during all of last year (17,900 million). However, the group reports a deteriorating outlook for world trade due to inflation and, in particular, rising energy prices. CMA CGM is benefiting from rising ocean freight prices due to the disruption of supply chains since the end of the health crisis.

In six months, the Marseille group will have raised 14.8 billion dollars, after a record 17.9 billion in all of 2021. This has earned it a place, along with energy companies, among the targets of a possible tax on “super profits”, demanded by the left opposition in France.

Debate over superprofits

Prime Minister Élisabeth Borne indicated last week that she did not close the door to this taxation, but that she preferred that each company be able to “lower prices for the consumer and give purchasing power to its employees.”

CMA CGM has made several gestures in recent months, including a further reduction of its rates on August 1 with a reduction of its freight rates of 750 euros per 40-foot container to mainland France and the overseas territories, that is , up to 25% of their prices, instead of the previously planned 500 euros. The company had also announced a reduction of 100 euros per 40-foot container for all French exports. She did not reveal a new measure on Friday.

Already suffering from “congestion affecting port terminals and inland logistics chains, resulting in longer transit times for ships”, the group has seen its volumes transported fall (measured in TEUs, “twenty-foot equivalent” , benchmark unit sector) 1.3% year-on-year in the second quarter, to 5.6 million, it said in a statement.

This announcement comes as the debate on the taxation of “super profits” has taken an unexpected turn in recent days, with the executive accused of being a “super profiter” himself through tax revenues higher than his expectations.

Guest on BFM TV/RMC on Friday, the Minister of Public Accounts Gabriel Attal once again had to deny the existence of a “kitten” within the State, while the accusations of excessive enrichment hitherto weighed more heavily on large companies such as TotalEnergies or CMA. -CGM.

“There are additional (tax) revenues but we spend much more to protect, to support the French,” he hammered.

The State, a super profiter?

With high inflation in recent months -accelerated by the conflict between Russia and Ukraine- and the good resistance of employment and growth in France, tax collection is, in fact, very dynamic. In a press release on the state budget situation, the Ministry of Finance also indicated on Friday that at the end of July 2022, “net tax revenue (set) at 172.5 billion euros compared to 144.1 billion at the end of July of 2021”.

Income related to corporate tax increased by nearly 16,000 million euros in one year, and VAT by 7,700 million. What confirms the thesis of the head of Medef Geoffroy Roux de Bézieux, who had estimated on Monday that “the greatest superprofit is the State”? Not for Gabriel Attal, who takes the example of VAT on gasoline.

“With the increase in gasoline prices”, the State received an additional VAT of “3 to 4 billion euros”. But “we spent 7,000 million euros on the fuel discount,” argued the Minister of Public Accounts.

“The State is not enriched by the situation, on the contrary,” he continued, in line with the comments already made by Elisabeth Borne. On Monday, the Prime Minister had replied to the president of Medef that “no, there were no super-profits on the State side.”

Despite these denials, over the past week the government has had to face a dangerous backlash over an issue that has plagued it since this summer. Originally, it was in fact a few large companies with exceptional financial results that were targeted by the left opposition. But instead of taxing them as the opposition demands, the government encouraged them to lower their rates, a call heard by TotalEnergies and CMA CGM.

“A tax has never improved the lives of our compatriots. Our compatriots need money in their pockets, not in the pockets of the State”, insisted the Minister of the Economy Bruno Le Maire before Parliament in July. At the return of the summer break, his line has not changed and number 2 of the Government now calls on foot to the banking and insurance sector to reduce bank commissions or insurance premiums. But supporters of a tax have not given up.

“We do not have the impression that the tax code can distribute (profits) fairly, especially since the Covid”, Esther Duflo judged on France Inter on Friday. So “the super-profit tax is a very good idea,” continued the co-winner of the 2019 Nobel Prize in Economics.

At Matignon, the tone has become a bit more conciliatory about such taxes.

“I think companies will show responsibility” by acting in favor of the purchasing power of the French, Elisabeth Borne said on Thursday. But “if some don’t, we don’t close the door” on one-off taxation of superprofits, she said.

The question promises to return in the debates on the 2023 budget project, which the government must present at the end of the month. The deputies of the presidential field are already advocating a compromise, in the form of a fund to finance the energy transition fed by the “super profits” of the companies. An “interesting” idea for Bruno Le Maire. He remains to be sold to the opposition, determined to negotiate their votes dearly while the government only has a relative majority in the National Assembly.